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LIBRARY 

OF  THE 

University  of  California. 

Received   ^        ;^^.  ,  i8gg' . 

Accession  hJo,6 // 3 ^^        .    Class  No. 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/businessstandardOOplumrich 


The 


Business-Standard  System 


of 


Double-Entry  Book-Keeping 


Using 


Only  One  Book  of  Accounts- 


By 

O.  M.  Plumb. 


Copyright,  1886,  by 

Cowperthwait  &  Co. 
PMladelpliia. 


GOWPERTHWAIT  &  Go.'S  EdDGATIONAL  SeRIES. 


The  following  List  of  our  most   Popular  Books   contains  only 

such  as  have  proved  most  satisfactory  in  actual 

use  in  the  School-Room. 


IMON'ROE'S  Readers  and  Spellers. 

M:0NR0E'S  IN^ew  Series  of  Readers. 

M:0NR0E'S  I^hysical  and  Vocal  Training. 
M:0NR0E'S  I^rimary  Reading  Cliarts. 


M:0N ROE'S  Vocal  Gymnastic  Cliarts. 
^V\r.A.RREN'S  New  Geograpliies. 

GrREENE'S  Improved  G-rammars. 

I>O^SVEIL.3L.'S  Language  Series. 

^v  3r . 

Tlie  Business-Standard  Copy-Books. 

-A.I*GrARS'  Greograpliical  IDrawing-Book. 
A;I>I>LET0:N^'S  Young  Cliemist. 

ROYSE'S  -A^merican  Literature. 


BERARID'S  N'ew  United  States  History. 
GOODRICH'S  Child's  TJ.  S.  History. 
11-A.GAR'S  .A^ritlimetical  Series. 

P^A^RKER'S  A.ritlimetical  Cliarts. 


Priee-Lists  and  Descriptive  Circulars  sent  Free  on  Application  to 

COWPERTHVSrAIT&  Co.,  Philadelphia 


CONTENTS 


PAGE 

Prefatory 4 

Definitions 7 

Chapter 

I.  The  Nature  of  Accounts 11 

II.   Classification  of  Accounts 14 

III.  General  Principles 18 

IV.  Opening  the  Book  of  Accounts 22 

V.  The  Direct-Entry  Book  of  Accounts 24 

VI.  The  System  of  Checks 28 

VII.  Balancing  Accounts 32 

VIII.  Closing  the  Book  of  Accounts 35 

IX.  Advantages  of  the  Business-Standard  System  41 

X.  The  Book  of  Accounts  Illustrated 46 

Exercise 

^  1.  A  Simple  Cash  Account 49 

2.  Personal  and  Mdse.  Accounts 50 

3.  Transactions  for  a  Boy's  Account 51 

4.  A  Mercantile  Series  of  Accounts    52 

5.  A  Partnership  Account 62 

6.  Transactions  for  a  Farm  Account 64 

7.  Transactions  for  a  Mechanic's  Account  .  .  66 

8.  Transactions  for  General  Practice  (Loss)  67 

9.  Transactions  for  General  Practice  (Gain)  68 
10.  Transactions  for  Gen.  Practice  (Partners)  70 

Appendix 72 

The  Business  Standard  Blank-Book 79 


PREFATORY. 


The  Business-Standard  Book-Keeping  is  in- 
tended to  serve  tliree  purposes: 

(1)  To  provide  pupils  of  District  and  Grammar 
Scliools  with,  a  simple  and  serviceable  Text-book, 

(2)  To  supply  teachers  and  young"  business  men 
with  a  complete  and  intelligible  Self-instructor. 

(3)  To  offer,  for  general  use  in  keeping  accounts, 
one  easy  and  adequate  form  which  everyone  can 
readily  understand,  and  which  will  meet  all  com- 
mon needs. 

The  Held  is  wide,  and  at  present  seems  unoc- 
cupied. To  successfully  accomplish  these  purposes, 
a  book  should  possess  the  following  merits : 

(1)  It  must  contain  all  the  essential  elements  of 
the  *' Written  Language  of  Commerce." 

(2)  These  must  be  communicated  in  a  manner . 
so  intelligible  that  even  the  uninitiated  can  readily 
apply  them  to  the  narration  of  any  ordinary  busi- 
ness event. 

(3)  Instead  of  furnishing  mere  illustrations  of 
the  diversified  and  conflicting  history  of  past  ex- 
periments in  accounts,  the  work  should  embody 
the  result  of  such  experiences  in  a  simple  method 
which  will  prove  to  be  a  safe  model  and  serve  as  a 
practical  guide. 


How  far  these  ends  have  been  attained  it  will  not 
be  difficult  to  determine  after  a  careful  examination 
of  the  work  itself. 

**  I  have  always  believed  that  I  ought  to  learn 
hook-keeping  in  an  hour  "  said  a  literary  friend. 
He  only  gave  forcible  expression  to  a  common 
sentiment  that  the  science  of  accounts  has  been 
needlessly  involved. 

Buying  and  selling  are  the  most  common  inci- 
dents of  life,  and  are  universally  understood  even 
by  children  and  the  uneducated.  Why  need  the 
recording  of  these  transactions  be  made  compli- 
cated and  difficult? 

When  a  boy  can  go  upon  the  street,  and,  almost 
without  education,  gain  a  support  by  means  of 
buying  and  selling,  why  may  he  not,  with  some 
slight  and  simple  training,  keep  an  intelligible 
record  of  his  dealings? 

The  science  of  accounts  is,  in  fact,  exceedingly 
simple  and  exact.  The  Art  of  Book-keeping  may 
be  readily  acquired,  is  easy  of  application,  and  uni- 
form and  satisfying  in  results. 

Yet  intelligent  observers  admit,  what  most  busi- 
ness men  believe,  that  book-keeping  as  a  branch 
of  common-school  study  has  proved  a  failure.  Nor 
are  teachers,  as  a  rule,  satisfied  with  results  in  this 
branch  of  study. 

The  great  difficulty  has  been  the  want  of  a  text- 
book that  presents  in  a  clear  and  orderly  method 
free  from  the  emharrassing  confusion  of  a  great 
variety  of  forms  the  few  simple  principles  upon 
which   rests    the    Art    of  Keeping  Accounts. 

The  Author  believes  it  possible  to  clearly  impart 


6 

the  essential  principles  of  accounts  in  a  few  easy 
lessons,  and  that  every  child  who  can  be  taught 
writing"  and  arithmetic  is  capable  of  keeping,  and 
should  be  qualified  to  keep,  an  accurate  set  of 
books. 

It  is  a  species  of  imposition  to  compel  the  student 
in  accounts  to  wade  through  and  copy  worse  than 
useless  *' single-entry"  forms  and  tiresome  varia- 
tions in  imaginary  methods.  One  perfect  form 
suffices,  and  the  simplest  and  easiest  form  of  in- 
telligent business  record  is  the  best. 

It  is  confidently  believed  that  the  Direct-Entry 
Method  here  proposed,  with  the  Simple  Cash-Book 
Form  and  One  Book  of  Accounts,  will  not  only 
prove  most  effective  as  a  means  of  imparting  a 
knowledge  of  accounts,  but  will  also  best  serve  the 
general  requirements  of  most  business  uses. 

The  fact  that  one  or  more  in  every  hundred  per- 
sons may  desire  more  complex  methods  than  the 
*' Single  Book  of  Accounts"  affords,  does  not  lessen 
its  value  for  the  ninety  or  ninety-nine  for  whose 
use  it  is  suggested.  C.  M.  P. 


DEFINITIONS. 


Account.  A  systematic  statement  of  debits  and 
credits.    Written  Acct.  or  %. 

Account  Current.  An  itemized  statement  of  a 
running  account  between  two  or  more  parties, 
showing  tlie  balance  due. 

Advance.  Money  paid  to  a  consignor  of  mer- 
cbandise  on  account  of  sales  to  be  made;  or  be- 
fore tbe  delivery  of  goods. 

Assets.  Available  means  for  payment  of  debts ; 
goods,  estate,  and  indebtedness  of  otbers. 

Balance.  To  close  an  account;  difference  be- 
tween debit  and  credit  sides  of  an  account;  an 
account  into  wbich.  balances  are  carried. 

JBiLL  An  itemized  statement  of  goods  sold.  Ttie 
term  is  also  applied  to  notes  and  drafts. 

Bill  of  Exchange.  An  order  for  the  payment 
of  money;   usually   applied  to   foreign   drafts. 

Bill  of  Laxiing.  A  receipt  from  a  vessel  or  trans- 
portation company  for  goods  received  for  convey- 
ance, containing  a  description,  or  marks  and  num- 
bers, and  an  agreement  to  deliver  to  the  consignee 
named  therein. 

Capital.    Property  employed  in  business. 


Check.    An  order  on  a  bank  for  money. 

Consignment.  A  slrLpment  of  mercliandise  or 
goods  to  be  sold  on  the  owner's  or  consignor's 
account,   not  purctiased. 

Days  of  Grace.  Three  days  allowed  for  pay- 
ment  after   a   note    or   draft  becomes   due. 

Discount.  An  allowance  made  on  an  account  or 
debt,  or  interest  deducted  in  advance. 

Draft.  An  order  from  one  person  on  another 
for  payment  of  money. 

The  "drawer"  is  the  one  who  signs  it;  the  "drawee," 
the  one   on  whom   it  is   drawn,   or  the  payee. 

A  sight  draft  is  payable  on  presentation. 

A  time  draft  or  note  is  payable  at  a  certain  specified  time 
"after  date"  or  "after  sight." 

Acceptance  of  a  draft  is  writing  across  the  face— preferably 
with  red  ink— the  word  "Accepted,"  with  the  name  of  the  ac- 
ceptor, and  usually  where  it  is  to  be  paid. 

The  face  of  a  draft  is  the  amount  for  which  it  is  drawn. 

Form  of  Draft.    days  after  date  pay 

to  the  order  of  A.  B.  $ ,  value  received, 

and  charge  to  the  account  of. 

To  Order.     Notes,    drafts,    and   checks  are  usually  written 

"Pay  to  the  order  of "    When  indorsed  "in  blank" 

—that    is,    with   the    name    onlj^— they    become    payable   to   the 
holder. 

.In.  Favor  of.  A  note  or  draft  is  said  to  be  in  favor  of  the 
party  to  whom  it  is  to  be  paid. 

To  Indorse.  To  write  one's  name  on  the  back  of  a  bill; 
to  become  obligated  for  its  payment. 


To  Indorse  in  Full.    Write  "  Pay  to  the  order  of., 
and  sign  the  name. 


Entry.    A  record  made  in  an  account  book. 

Ex.  Out  of;  as,  "Ex.  Str.  Servia,"  out  of  the 
steamer  Servia.  Used  to  indicate  by  wliat  vessel 
goods  were  received. 

Honor,  as  applied  to  drafts,  •  means  to  accept 
and  pay  when  due. 

Inventory.    A  detailed  account  of  property. 

Invoice.  A  hill  of  merchandise  houg-ht  or  sold; 
an  inventory  of  goods  consigned  for  sale. 

Liability.  Obligation  to  pay.  An  indorser  of  a 
note  is  liable  to  be  called  on  to  pay  it  if  the  maker 
fails  to  do  so.  To  transfer  a  note  without  this  lia- 
bility, write  "without  recourse"  after  the  name. 

Liabilities.  Debts  of  an  individual,  or  claims 
against  him. 

Merchandise.  A  general  name  for  goods  bought 
and  sold.    (Written  Mdse.) 

Note.    A  written  obligation  to  pay  money. 

The  '*  maker"  is  the  person  who  signs  it;,  the  "payee"  is 
the  one  to  whom  it  is  to  be  paid;  the  "holder"  is  the  one 
who  has  legal  possession  of  it. 

Form    of    Note.    days  after  date   I 

promise     to     pay    A.    B.     or    order    at 

$ ,   value  received. 

Maturity.    The  time  when  a  note  or  draft  becomes  due. 

A  Negotiable  Note  is  one  payable  to  order  or  to  bearer. 

A  Non- Negotiable  Note  is  one  in  which  the  words  "or 
order,"  "to  the  order  of,"  or  "or  bearer,"  or  their  equivalent,  are 
omitted ;  so  that  the  promise  to  pay  is  only  to  the  person 
named. 


10 

Order.  A  written  request  for  the  payment  of 
money  or  delivery  of  something. 

*  Policy  of  Insurance.    A  written  contract  given 
by  the  insurer  to  the  insured. 

Premium.    Money  paid  for  insuring  property.    - 

Protest.  A  formal  legal  notice  by  a  notary 
public  that  a  note  or  draft  has  not  been  paid. 

Real  Estate.  Houses  and  land.  Other  or  mov- 
able property  is  termed  *' Personal." 

Resources.  Any  species  of  property  having 
value ;  effects  or  assets ;  money  on  hand  and  debts 
due. 

To  Credit.  To  trust;  to  enter  upon  the  credit 
side,  or  in  the  right-hand  column. 

To  Debit.  To  charge,  or  to  enter  upon  the  debit, 
or  left-hand,  side. 

To  Discount.  To  deduct  interest  for  the  un- 
expired time  of  an  obligation  for  payment  of 
money,   and  to   pay  the   remainder. 

Voucher.  A  document  or  paper  proving  that 
some  payment  has  been  made,  or  other  trans- 
action effected. 


CHAPTER  I. 
THE   NATURE   OF  ACCOUNTS. 

1.  Book-keeping  is  the  art  of  recording"  transac- 
tions where  there  is  a  change  of  ownership  in 
values,  or  in  what  represents  value. 

2.  "Accounts"  are,  in  a  general  sense,  the  or- 
derly records  of  these  transfers  of  value. 

3.  The  transactions  themselves  are  known  as  Buy- 
ing, Selling,  or  Excliange. 

4.  Every  transaction  representing  the  change  of 
ownership  in  any  property  is  tivo-fold—tYidbt  is,  it 
concerns  two  parties;  hence,  "Double  Entry"  is 
the  natural  method  of  keeping  accounts. 

5.  In  the  sale  of  goods,  for  example,  there  must 
be  Si  seller ^  by  whom  something  is  delivered  or  the 
promise  of  delivery  made;  and  a  purchaser,  by 
whom  something  is  received. 

6.  Every  person  or  thing  with  whom  a  transac- 
tion is  made  takes  from  or  adds  to  the  business; 
is  benefited  or  confers  a  benefit. 

In  other  words,  every  transaction  adds  an  amount 
to  some  one  account  and  takes  it  from  some  other. 

11 


12 

7.  Every  entry  of  a  business  transaction,  there- 
fore, when  fully  recorded,  is  a  double  entry,  or 
consists  of  an  entrj^  to  the  debit  of  one  account 
and  to  the  credit  of  another. 

That  is,  for  every  debit  there  is  a  credit  of  equal 
amount. 

8.  Consequently,  every  account  has  two  sides, 
called  Debit  and  Credit,  written  I>r.  and  Cr.  I>r, 
always  refers  to  the  left-hand  side,  and  Cr,  to  the 
right-hand  side,  of  an  account. 

9.  The  Debit  side  of  an  account  is  that  on  which 
is  entered  any  item  of  value  given  to  or  for  that 
account. 

The  Credit  side  is  that  on  which  is  recorded  any 
value  received  from  that  acopunt. 

10.  A  Debtor  is  one  who  owes  the  business.  (Writ- 
ten Br.) 

A  Creditor  is  the  opposite,  or  one  to  whom  some- 
thing is  due  from  the  business.    {Written  Cr.) 

11.  These  relations  of  debit  and  credit  may  exist 
with  things  as  well  as  with  persons— that  is,  a 
stock  of  goods,  a  fleld  of  a  farm,  the  product  of  a 
factory,  a  sewing-machine,  a  horse,  or  a  ship  be- 
comes indebted  for  the  first  cost  and  expense  of 
maintenance  or  improvement.  It  is  credited  with 
any  income  derived  therefrom,  any  increase  in 
value,  and  the  price  when  sold. 

A  farm  becomes  a  debtor  for  its  cost  or  any  im- 
provement added. 

It  becomes  a  creditor  for  the  value  of  any  crop  it 
produces. 


13 

12.  Let  it  be  remembered  that  value  exchaxiged 

is  tbe  basis  of  all  book-accounts. 

In  every  transaction,  real  or  supposed  value  is 
given  and  received. 

13.  Tbe  value  wbicb  goes  out  is  eitber  for  tbe 
benefit  ^  (1)  some  person  wbo,  not  paying  at  once 
for  it,  becomes  a  debtor,  or  is  given  (2)  for  some 
equivalent  property,  or  (3)  for  some  account  rep- 
resenting gain  or  loss;  and  tbat  property  or  account 
becomes  debtor. 

14.  Tbe  value  wbicb  conies  in  is  eitber  (1)  from 
some  one  wbo,  not  being  at  once  paid,  becomes  a 
creditor,  or  (2)  is  paid  for  by  means  of  some  otber 
property,  or  (3)  by  some  account  representing  gain 
or  loss;  wbicb  property  or  account  becomes  cred- 
itor. 

15.  The  matbematical  principle  of  equality  gov- 
erns all  mercantile  entries. 

Every  debit  has  a  credit  and  every  credit  has  a 
debit  of  equal  amount. 

16.  It  therefore  follows  that  at  any  moment  the 
sum  of  all  the  debits  of  a  true  record  must  equal 
the  sum  of  all  the  credits. 


CHAPTER  II. 
CLASSIFICATION  OF  ACCOUNTS. 

17.  A  Personal  Account  is  the  record  kept  with 
an  individual  (or  firm),  showing  the  relations  of 
that  person  to  the  business  or  his  dealings  there- 
with. 

18.  An  account  may  also  he  kept  in  the  name  of 
any  thing  that  has  value  or  represents  value,  that 
causes  an  outlay  or  is  a  source  of  income. 

19.  Cash  is  the  account  of  all  moneys  received 
and  paid  out,  in  whatever  form  they  may  he  held. 

This  account  may  be  considered  as  standing  for 
the  safe  or  drawer  where  the  money  is  deposited. 

20.  All  moneys  received  are  placed  to  the  debit 
of  Cash,  to  its  credit  all  moneys  paid  out.  The 
difference  shows  the  balance  on  hand. 

21.  Bills  Receivable  is  the  account  of  all  notes 
and  acceptances  due  the  business,  or  other  people's 
promises  to  pay. 

22.  Bills  Payable  is  the  account  of  the  proprie- 
tor's notes  and  acceptances  which  are  to  be  paid. 

23.  Merchandise  is  the  customary  name  given  to 
the  account  representing  goods  of  whatever  name 
or  character. 

Each  item  of  merchandise  purchased  and  re- 
ceived is  placed  to  the  debit  of  Mdse.  account; 
each  sale,  to  its  credit. 

14 


^^  UNIVERSITY 
15 


Merchandise  account  may  be  regarded  as  stand- 
ing for  a  person  to  wliom  the  goods  are  entrusted 
or  for  the  shelves  whereon  they  are  stored. 

The  account  is  debited  when  the  goods  are  placed 
there,  credited  when  they  are  removed. 

24.  Merchandise  Account  may   be    subdivided    to 

represent  any  specified  portion  or  kind  of  goods. 

Such  division  as,  for  example,  into  Flour  and 
Grain  accounts,  or  Dry  Goods  and  Grocery  ac- 
counts, facilitates  the  estimate  of  profits  upon  any 
branch  of  the  business  and  a  knowledge  of  the 
stock  on  hand  without  an  Inventory. 

25.  In  entering  purchases  the  entry  can  be  made 
"  as  per  bill,"  omitting  the  items.  The  bill,  kept  on 
file,  will  always  supply  these. 

26.  In  entering  sales  the  items  should  be  re- 
corded for  complete  information  and  as  full  legal 
evidence  of  the  transaction. 

27.  Where  real  estate  is  owned  or  forms  a  por- 
tion of  the  capital  or  investment,  an  account  of 
that  name  should  be  opened  and  kept. 

P      The  debit  side  will  show  all  that  it  has  cost,  in- 
j    eluding  interest,  taxes,  etc. 

The  credit  side  will  show  any  increase  from  rents 
or  sales. 

28.  The  cost  of  buildings  or  permanent  improve- 
ments is  charged  to  Real  Estate  Account. 

Rent,  Insurance,  and  ordinary  repairs  may  go 
either  to  this  account  or  to  a  separate  account 
opened   for   each   one    or   for   all   of  these. 


IG 

29.  To  the  debit  of  Expense  Account  place  all 
amounts  paid  out  for  expenses. 

This  account  may  be  divided  into  Office,  Personal, 
and  House  Expense  if  desired.  Also  for  minor  items 
such  as  Rent,  Labor,  Material,  Postag'e,  etc. 

The  separated  accounts  can  be  aggregated  under 
General  Expense  account  at  the  end  of  the  year. 

Any  moneys  received  or  returned  from  expense 
accounts  go  to  the  credit  side. 

30.  In  a  similar  manner  minor  sources  of  profit 
or  gain,  such  as  Commission,  Salary,  Investment, 
Crops,  etc.,  may  each  be  specified  under  special  ac- 
counts to  any  desired  and  practicable  extent. 

31.  It  is  better  to  open  a  new  account  for  any 
new  department  of  cost  or  profit  if  any  doubt 
arises  as  to  the  propriety  of  entering  the  item 
under  any  existing  account. 

The  new  account  can  be  transferred  to  General 
Expense  at  any  time,  or  closed  to  Profit  and  Loss, 
as  will  be  seen  in  another  chapter. 

32.  Stock  or  Capital  Account  is  the  term  gen- 
erally used  to  represent  the  personal  interest  of 
the  proprietor  in  the  business  or  the  value  of  the 
business  itself. 

It  is,  in  efi'ect,  a  summary  of  other  accounts :  the 
debit  shows  the  Liabilities,  the  credit  the  Resources, 
or  what  is  possessed  in  the  business. 

33.  Where  there  are  rartiters,  Capital  acct.  is  sub- 
divided to  represent  the  proportionate  interest  of 
each.  That  is,  "A.  B.  Capital  %  "  and  "  C.  D.  Capital 
%,"  etc.,  will  together  include  the  total  value  of  the 


17 

business,  in  equal  or  unequal  sliares,  according  to 
tlie  terms  of  copartnersMp. 

34.  Accounts  may  be  classified  as  Real  and  Rep- 
resentative. 

Real  Accts.  are  tbose  kept  with,  persons  or  with, 
thing's  which  have  a  fixed  or  determined  value  — 
with  realities'  They  exhibit,  on  the  one  hand, 
actual  Resources  or  Assets,  and  on  the  other  Lia- 
bilities or  Indebtedness. 

Cash,  Bills  Fay  able,  and  BUls  Receivable  are  Real 
accts. ;  so  also  are  all  property  accts.  covering  per- 
manent investments  not  bought  and  sold  for  profit. 

35.  Representative  Accounts  are  such  as  rep- 
resent the  Grains  or  Losses  of  the  business ;  as,  Mer- 
chandise, Hardware,  Grain  or  Farm  account,  In- 
terest, Commission,  Expense,  or  any  account  stand- 
ing for  a  source  of  income  or  expenditure. 


Note.— This  use  of  the  terms  "Real"  and  "Representative"  is 
not  strictly  accurate,  but  it  is  the  most  convenient,  and  with  a 
word  of  explanation  need  not  be  misunderstood.    • 

The  one  class  of  accts.  termed  Iteal  measures  the  worth,  or 
financial  standing,  of  a  business  at  rest.  Some  authors  designate 
these  as  **  Accounts  of  Finance.^' 

The  other  class  of  accts.  represents  the  earning  activities  of  a 
business  or  its  progress  in  action.  These  have  been  termed 
**  Accounts  of  Business," 

Mdse.  and  other  speculative  or  industrial  accts.  are  "Repre- 
sentative" during  the  progress  of  a  business,  as  they  represent 
undetermined  gain  or  loss. 

At  closing,  or  at  any  fixed  time,  the  value  ascertained  by  in- 
ventory as  on  hand  becomes  an  asset,  and  hence  has  a  status  under 
Real  accounts. 

If  this  stock  is  again  put  in  trade,  it  must  be  again  classified  as 
a  working  or  accumulating  acct.,  or  "Representative." 

(See  further  under  Chapter  VIII.) 


CHAPTER  III. 
GENERAL    PRINCIPLES. 

36.  Books  of  Account  should  be  accurately  and 
properly  kept,  for  three  specific  purposes: 

I.  To  give  immediate  iiiform.ation  at  any  moment 
of  the  standing  of  a  given  account ; 

II.  To  readily  determine  the  gains  or  losses  of 
the  business  or  any  of  its  departments; 

in.  To  preserve  a  record  of  business  transactions 
in  a  legal  form,  as  evidence  if  required. 

37.  In  making  the  record  the  first  question  is, 
What  persons  or  accounts  are  the  parties  to  the 
transaction  ? 

The  book-keeper  is  simply  a  faithful  historian 
recording  a  transfer  of  value  from  some  party  or 
source,  which  by  such  transfer  becomes  Creditor, 
to  another,  which  becomes  Debtor. 

In  every  case  such  Creditor  and  Debtor  must 
have  an  account  name,  under  which  the  proper 
amount  is  to  be  registered. 

38.  The  person  or  persons  engaging  in  the  busi- 
ness—represented by  their  Capital  accts.— should 
be  credited  with  the  amount  invested  by  each,  or 
what  values  are  possessed  or  risked  in  the  business, 
and  later  with  all  gains  or  profits,  divided  in  due 
proportions. 

The  same  accounts  are  debited  with  all  amounts 
which  are  owed,  or  the  debts  on  opening  the  busi- 
ness; also  with  all  sums  withdrawn  at  any  time; 
and  finally  with  any  losses  incurred  in  the  busi- 
ness. 

18 


19 

39.  Real  Accounts  are  debited  witli  what  tliey 
receive  from  tlie  business,  and  credited  with,  what 
the  business  receives  from  them. 

40.  Representative  Accounts  are  debited  with 
items  of  cost,  expense,  loss,  or  outgo,  and  credited 
with  all  receipts,  income,  increase,  or  enhanced 
value. 

41.  Cash  Account  is  Dr,  for  all  receipts  of  cash, 
and  €r.  for  all  payments. 

42.  JVla«ihandise,  or  any  similar  account,  is  Dr. 
for  purchases,  and  Cr.  for  sales. 

43.  Personal  Accts.  are  Dr.  for  what  they  re- 
ceive for  which  they  do  not  pay,  and  Cr.  for  what 
is  received  from  them,  and  unpaid  for. 

44.  Bills  Payable  Account  is  Dr.  for  notes  paid, 
Cr.  f^r  notes  given. 

The  time  and  date  of  payment  of  all  notes  given 
or  received  should  be  minutely  recorded  in  the 
entry. 

45.  Bills  Receivable  is  Dr.  for  the  notes  of  others 
which  are  received,  and  Cr.  for  those  paid  or  dis- 
posed of. 

46.  Expense  Account  is  Dr.  for  all  outlay  on 
that  account,  and  Cr.  for  receipts,  if  any,  from 
the   same   source. 

47.  Capital  Account  is  Dr.  for  all  debts  assumed 
and  losses  incurred,  and  Cr.  for  Capital  invested 
and  profits  realized. 

48.  Generally,  Debit  what  costs,  the  amount  of 
the  outlay,  and  credit  the  source  from  which  the 
payment  comes. 

Credit  what  produces,  the  amount  realized,  and 
debit  that  to  wliich  tne  proceeds  or  benefit  goes. 


20 

Or,  concisely  stated,  debit  what  conies  in,  and 
credit  wliat  brings  it  in;  credit  wliat  goes  out,  and 
debit  what  candies  it  out. 

Business  has  been  called  "a  game  of  give  and 
take."  That  which  gives  is  Or.,  and  that  which 
takes  is  Dr. 

49.  When  Merchandise  is  bought,  debit  Mdse. 
%  with  the  amount  of  cost;  and  if  it  is  not  paid 
for,  credit  the  seller.  If  paid  for  in  cash,  Mdse.  is 
Dr.,  and  Cash  Cr.  If  paid  for  by  note,  Mdse.  is  Dr., 
and  Bills  Payable  Cr.  When  the  note  is  paid.  Bills 
Payable  is  Dr.,  and  Cash  Cr. 

50.  When  Merchandise  is  sold  on  %— that  is,  not 
paid  for— debit  the  purchaser,  and  credit  Mdse.  If 
paid  for  in  Cash,  Cash  is  Dr.,  and  Mdse.  Cr.  If  paid 
for  by  note,  Bills  Receivable  is  Dr.,  and  Mdse.  ts  Cr. 
When  the  note  is  paid,  Cash  is  Dr.,  and  Bills  Re- 
ceivable is  Cr. 

51.  When  an  account  against  the  business  is  set- 
tled by  the  payment  of  cash,  the  account  is  Dr., 
and  Cash  is  Cr. 

If  paid  by  note,  the  account  is  Dr.,  and  Bills 
Payable    Cr. 

And  when  the  note  is  paid,  Bills  Payable  is  Dr., 
and   Cash  Cr. 

52.  "WTien  an  account  due  the  business  is  paid 
by  the  receipt  of  cash,  Cash  is  Dr.,  and  the  ac- 
count Cr. 

If  paid  by  note,  Bills  Receivable  is  Dr.,  and  the 
account  Cr. 

When  the  note  is  paid,  Cash  is  Dr.,  and  Bills 
Receivable  Cr. 


21 

53.  If  interest  accrues  on  what  is  to  be  paid 
out,  Interest  is  Dr.,  and  tlie  account  Cr.  If  paid. 
Cash  is  Or. 

If  it  accrues  on  what  is  coming-  in,  that  account 
is  Dr.,  and  Interest  Cr.    If  paid.  Cash  is  Dr. 

If  interest  accrues  on  a  note  given.  Interest  is 
Dr.,  and  Bills  Payable  Cr.  When  paid.  Bills  Pay- 
able is  Dr.,  and  Cash  Cr. 

If  it  accrues  on  a  note  received.  Bills  Beceivable 
is  Dr.,  and  Interest  Cr.  When  paid.  Cash  is  Dr.,  and 
Bills  Beceivable  Cr. 

54.  In  keeping-  an  account  with  a  field,  a  crop, 
a  shop  or  machine,  a  horse,  or  any  other  thing-  or 
cause,  the  account  is  debited  with  all  expenditures 
in  the  purchase,  keeping-,  working-,  sale,  etc.,  and 
credited  with  receipts,  products,  income,  or  any 
value  received  or  accruing-. 

55.  Study  carefully  the  nature  of  each  trans- 
action. Every  event  to  be  recorded  indicates  some 
good  gained,  or,  at  least,  recognized.  The  source 
of  that  good  is  Cr.  The  party,  thing,  or  account 
benefited  is  Dr. 

Always  the  Dr.  and  Cr.  are  equal;  also  always 
the  sum  of  the  debits  and  the  sum  of  the  credits 
are  equal. 


a^ 


CHAPTER  IV. 
OPENING    THE    BOOK    OF   ACCOUNTS. 

56.  How  to  begin  the  record  is  the  puzzling 
problem. 

Perhaps,  If  the  business  is  that  of  selling  goods, 
the  first  thought  will  be.  Debit  the  purchaser  the 
i9.rst  bill  of  goods  sold. 

But  the  sale  is  not  the  conrniencement  of  the 
business. 

Then  credit  the  one  of  whom  they  were  bought 
the  cost  of  the  goods? 

But  does  the  purchase  of  goods  begin  **the  his- 
tory of  the  business''? 

There  must  first  be  the  means  wherewith  to  com- 
mence business;  therefore, 

57.  Open  the  Book  of  Account  by  stating  the 
Capital  or  amount  invested  in  the  business,  as 
follows : 

Credit  Capital  Account  with  the  amount  that 
is  risked  in  the  business— a  fixed  sum  or  the  entire 
possessions,  as  the  case  may  be.  Let  these  items 
be  entered  in  the  exact  form  in  which  they  are 
held — Cash,  Mdse.,  Accounts,  Bills  Receivable,  etc. 

It  is  customary  to  make  this  Proprietor's  ac- 
count the  first  in  the  book. 

58.  If  there  are  Associates  in  the  business,  let 
the  credit  entries  to  the  several  Capital  Accounts 
represent  the  proportionate  investment  of  each 
of  the  partners.    (See  1[  33.) 

22 


59.  Debit  Cash  Account  with,  that  part  of  Capital 

which,  is  money,  in  bank  or  drawer. 

Debit  Merchandise  with  that  part  of  Capital 
which   consists   of  goods,    as   per  inventory. 

Debit  all  Individuals  with  the  amounts  due 
from  them,  Bills  Receivable,  with,  notes  due  the 
business,  and  Real  Estate,  or  other  forms  of  value^ 
to  be  kept  separate,  with  the  proper  amounts. 

(Of  course  these  items  have  been  entered  on 
the  credit  side  of  Capital  Account.) 

60.  Debit  Capital  Account  with  the  amounts  of 
all  Accounts  Payable  and  Bills  Payable. 

Credit  each  Individual  Creditor  With  the  amount 
due  him,  and  Bills  Payable  with  all  Notes  to  be 
paid  out  of  the  business. 

61.  Thus  stated,  the  two  sides  of  Capital  Account 
represent  or  express  all  that  is  possessed  in  the 
business  and  all  that  is  due  from  it.  The  differ- 
ence shows  the  net  value  of  the  investment,  or 
the   actual   Capital  employed. 

62.  A  ^^  Personal  ^^  Account  is  usually  kept,  in 
addition,  with  the  Proprietor  or  with  each  Partner, 
for  the  record  of  all  items  of  personal  debit  or 
credit.  At  the  end  of  the  year  such  accounts  are 
closed  into  the  respective  Capital  Accounts. 

In  the  case  of  withdrawal  of  Capital  by  either 
Partner  the  entry  is  made  direct  to  the  Dr.  of  such 
Partner's  Capital  Account.    (See  Exercise  No.  5.) 

63.  The  Book  of  Accounts  is  now  *'open"  for 
the  entry  of  the  first  business  transaction— the 
purchase  or  sale  of  Mdse.,  the  payment  or  receipt 
of  Cash,  or  any  transfer  of  value  requiring  record. 

Observe  the  general  instructions  given  in  IT  55. 


CHAPTER  V. 
THE  DIRECT-ENTRY   BOOK  OF  ACCOUNTS. 

64.  The  Principles  of  Accounts  thus  far  stated, 
as  well  as  those  relating  to  Balancing  and  Closing, 
which  follow  in  future  chapters,  are  common  to 
all  Double-Entry  Accounts,  since  principles  do 
not  vary. 

The  methods  of  applying  them,  however,  and 
the  forms  employed,  are  as  varied  as  the  peculiar- 
ities of  different  branches  of  trade. 

65.  It  is  impossible  for  the  student  to  foreknow 
what  exact  form  he  may  be  required  to  adopt  in 
practice  when  given  employment  by  others. 

The  study  of  a  variety  of  forms  at  first  tends 
only  to  confusion.  Then,  at  least,  if  not  ever  and 
always,  the  simplest  form  is  the  best. 

66.  In  the  Business-Standard  System  One  Book 
of  Accounts  only  is  employed,  and  that  of  the  sim- 
plest possible  form,  for  the  simplest  possible  rec- 
ord, yet  one  ensuring  all  the  necessary  purposes 
required  in  ordinary  business. 

67.  The  ruling  of  this  Book  of  Accounts  will  be 
seen  by  referring  to  the  chapter  of  illustrations, 
and  is  familiar  to  all  who  have  kept  a  Cash  Ac- 
count. 

It  will  be  observed  that  there  are  seven  columns ; 
one  each  for  the  month  and  day,  a  wide  column 
for  the  particulars  of  the  transaction,  and  double 
columns  for  amounts;  that  is,  a  space  for  $  and 
one  for  cts.  on  both  the  Dr.  and  the  Cr.  side. 

24 


25 

There  should  be  an  index  in  the  front  of  the 
book  or  separate. 

68.  JDevote  one  page  to  each  account.  When  the 
account  is  likely  to  be  larg-e,  leave  several  succeed- 
ing* pag-es  blank. 

Write  the  name  of  the  account  at  the  top,  with 
Dr,  over  the  first,  or  left-hand,  double  column  for 
amounts,  and  Cr.  over  the  second,  or  rig-ht-hand, 
column. 

Then  place  the  name  and  the  number  of  the 
pag-e  in  the  Index.  For  example:  If  the  account 
is  that  of  John  Smith  and  his  pag'e  is  twenty-seven, 
under  S.  write.  Smith,  John— 27* 

69.  To  make  the  particular  entry,  write  the  year 
over  the  month  column;  then  on  the  first  line 
enter  the  month  and  the  day. 

If  the  entry  is  upon  the  Dr.  side,  begin  at  the 
extreme  left  of  the  wide  column  with  the  word 
To,  and  make  a  full  entry  of  the  transaction, 
extending*  the  amount  in  the  first,  or  Dr.,  $-and- 
cts.  column. 

If  the  entry  is  upon  the  Cr.  side,  enter  the  date, 
then  commence  about  an  inch  to  the  rig-ht  with  the 
word  By,  and  enter  the  items  in  full  as  before, 
extending-  the  amount  in  the  second,  or  Cr.,  $-and- 
cts.  column. 

70.  Immediately  turn  to  the  proper  opposing- 
account  and  make  the  corresponding-  Dr.  or  Cr. 
entry  in  the  same  manner. 

71.  In  selling-  g-oods  charg-e  the  Individual  Ac- 
count first,  then  immediately  give  Mdse.  Cr. 

When  an  amount  is  paid  on  account,  Cr.  the  in- 
dividual, then  immediately  Dr.  Cash. 


26 

72.  When  one  transaction  includes  two  or  more 
items,  the  partial  amounts  should  be  "short-ex- 
tended "—that  is,  each  item  be  set  down  at  the  right 
of  the  ** Transaction"  column,  a  line  be  drawn  be- 
neath the  last,  and  the  total  extended  opposite, 
in  the  proper  Dr.  or  Cr.  columns.  (See  Exercise 
No.  2.) 

Any  number  of  lines  may  be  used  for  the  full 
description  of  a  transaction,  except  in  entries  to 
Bills  Payable  and  Bills  Receivable  Accounts,  where 
each  entry  should  occupy  but  one  line. 

73.  In  entering  a  note  given  or  received,  in  Bills 
Payable  or  Bills  Receivable  Accounts,  leave  one  blank 

line  immediately  following  each  item  for  the  oppo- 
site entry  when  paid. 

This  blank  line  is  especially  important  in  Bills 
Payable  Account,  as  it  calls  attention  to  unpaid 
notes.  If  there  are  no  blank  spaces  in  this  ac- 
count there  are  no  outstanding  notes. 

74.  The  account  of  deposits  with  a  bank  should 
be  kept  on  the  stubs  of  the  check-book.  The 
amount  remaining  in  bank  being  usually  regarded 
as  part  of  the  "Cash  on  hand,"  no  book-account 
with  the  bank  is  required.  If  for  any  reason  such 
an  account  is  preferred,  payments  by  check  will 
be  credited  to  the  bank  instead  of  to  Cash. 

75.  Minor  items  of  Cash  payments  may  be  kept 
in  a  "Petty  Cash-Book"  and  transferred  to  Cash 
and  the  other  proper  accounts  in  gross  sums  at 
the  close  of  the  day  or  week.  (See  final  entry  in 
Cash  Account,  Exercise  4.) 

76.  If  the  business  is  extensive,  the  Book  of 
Accounts  may  conveniently   be  in   two   volumes, 


27 

paged  continuously,  the  first  volume  to  be  devoted 
to  Personal  and  Miscellaneous  Accounts,  the  second 
to  Cash  Account  and  Mdse.  or  similar  representa- 
tive accounts.  This  will  facilitate  making  the 
opposite    entries. 

77.  If  an  error  occurs  in  entering*  any  item,  it 
may  he  corrected  hy  making  exactly  the  oppo- 
site entry.  If  A.  B.  has  been  debited  $5  when  he 
should  have  been  credited,  make  a  correcting 
entry  to  balance  the  error— that  is,  credit  him 
By  error,  $5,  Then  proceed  to  make  the  proper 
entry  in  due  form. 

Of  course  correcting  entries  must  be  made  as 
complete  as  the  original  error.  If  the  erroneous 
entry  was  completed—^,  e,,  made  to  both  accounts 
—the  correcting  entry  must  extend  to  both  ac- 
counts also. 

It  is  best  to  make  correcting  entries  with  red 
ink,  to  distinguish  them  from  records  of  actual 
transactions. 

78.  If  it  is  desired  to  preserve  the  amount  of 
each  day's  transactions,  a  condensed  or  memoran- 
dum record  may  be  kept  of  all  entries  to  the  sev- 
eral accounts  as  they  are  made  each  day. 

This  record  need  include  only  the  pages  of  the 
respective  accounts,  and  the  amounts,  extended 
under  the  proper  Dr.  and  Cr.  columns.  At  the 
close  of  the  day  (or  week)  the  columns  can  be 
footed. 


CHAPTER  VI. 
THE  SYSTEM   OF  CHECKS. 

79.  While  every  transaction  requires  two  entries 
—a  Dr.  to  one  account,  and  a  Cr.  to  another— both, 
of  these  need  not  in  all  cases  be^made  in  detail. 
A  minute  description  having*  been  made  to  one 
account,  if  the  opposite  account  he  Cash  or  Mdse,, 
the  items  need  not  be  repeated.  It  is  sufficient 
for  these  accounts  that  the  total  amount  of  each 
transaction  be  entered.  (See  illustration,  Exercise 
No.  2.) 

80.  It  is  always  necessary,  however,  that  each 
entry  shall  be  readily  traced  and  identified— dis- 
tinguished from  all  others— for  the  correction  of 
errors  and  accurate  determination  of  results.  This 
necessitates  a  system  of  checks,  which,  though  very 
simple,  requires  to  be  carefully  observed. 

81.  As  the  chief  liability  to  error  is  a  neglect  to 
make  the  second  entry,  observe  this  rule: 

Soon  as  the  record  is  complete  ejcamine  both  en- 
tries;  and  if  found  correct,  with  the  amounts  upon 
opposite  sides  of  the  respective  accounts,  place  the 
number  of  the  page  of  each  opposing  account  verti- 
cally or  diagonally  on  or  near  the  second  column 
ruling. 

This  is  the  first  check  upon  the  record. 

82.  Checking.  At  the  end  of*  each  month,  or, 
in   a  large   business,  weekly,  begin   with   the   ac- 

28 


29 

count  on  the  first  pag-e,  and  check  the  first  item, 
of  the   entries   for  the  month. 

Turn  to  the  page  of  the  opposite  entry ;  and  if  it 
is  found  correct,  check  that  item  also.  Proceed 
with  the  second  item,  and  so  on  till  all  are  found 
correct  and  checked. 

83.  This  check-mark  may  be  placed  on  the 
ruling"  between  the  Dr.   and  Cr.  columns. 

If  any  entries  remain  unchecked  or  the  corre- 
sponding entry  cannot  be  found,  there  has  been 
an  error   or   omission  which   must  be   corrected. 

The  checking-  of  entries  is  imperative,  as  it  gives 
assurance  of  correctness  in  the  work. 

84.  The  most  perplexing  transactions  to  record 
are  those  that  may  be  termed  compound— that  is, 
where  the  amount  of  a  single  transaction  is  prop- 
erly divisible  on  one  or  both  sides  into  two  or 
more  accounts. 

For  example:  A  bill  of  goods,  including  freight 
and  cartage,  is  paid  for  in  cash.  This  will  require 
a  Dr.  entry  to  Mdse.  for  the  cost  of  the  goods,  and 
a  Dr.  entry  to  Expense  Acct.  for  the  freight.  The 
Cr.  entry  to  Cash  may  be  in  one  item  for  the  whole 
amount,  or  it  can  be  separated  in  Cash  Acct.  and 
entered  in  two  items  to  correspond  with  the  Dr. 
entries  to  Mdse.  and  Expense. 

If  not  separated,  the  pages  of  both  Mdse.  and 
Expense  Account  should  be  noted  opposite  the 
Cash  entry. 

Always  make  the  entry  intelligible,  and  note  the 
pages  of  all  opposite  entries. 


30 

85.  Illustrations  of  compound  entries  will  be 
found  in  Exercise  No.  4— Jan.  16,  IT,  and  18. 

I.  Bills  Payable  Account  is  debited  in  one  entry 
$100,  wbicli  amount  is  made  up  of  a  Casb  payment 
of  $96.37  and  Discount  $3.63.  This  entry  is  there- 
fore divisible ;  but,  being  made  in  one  item,  there 
are  two  page-numbers,  referring  to  Cash  and  to  In- 
terest Accounts,  and  two  check-tnarks  to  correspond. 

II.  Likewise,  on  the  18th,  a  payment  was  made 
of  $100  on  Mortgage  and  $15  accrued  Interest, 
The  Cash  entry,  being  on  one  line,  requires  two 
checks  and  the  page-numbers  of  Real  Estate  and 
Interest  and  Commission  Accounts. 

III.  On  the  17th,  Mdse.  was  bought  and  a  payment 
made,  in  part  of  Cash  and  part  by  Draft.  Here  the 
entry  to  Mdse.  Account  is  divided,  to  correspond 
with  the  opposite  items. 

86.  Comparisons  are  more  difficult  and  errors 
can  be  less  readily  traced  where  entries  are  com- 
bined, as  in  the  first  two  cases  above  cited. 

In  Bills  Payable  Account  a  single  entry  is  un- 
avoidable, as  but  one  blank  line  is  left  for  the 
closing  entry  for  each  item.  (See  H  73.)  In  Cash 
entries  the  division  is  optional. 

Accountants  will  soon  learn  how  far  it  is  wise 
to  risk  errors  by  combining  entries  to  save  space. 

87.  Entries  to  Cash  or  Mdse.  Accounts  (as  sug- 
gested in  1[  79)  need  include  only  the  total  amount 
of  transaction,  provided  the  opposite  entry  is 
itemized.  The  date  and  the  page-number  afford 
easy  means  for  referring  to  the  items,  and  of 
verifying  the  correctness  of  the  entries. 


31 

If  preferred,  each  item  of  Mdse.  sales  can  be 
"short-extended"  in  Mdse.  Account  (see  H  72),  only 
the  total  amount  for  the  day  heing*  carried  out  in 
the  Cr.  column.  Kept  in  this  way,  Mdse.  Account 
shows  at  a  g-lance  the  total  sales  for  each  day. 
Observe  the  order  of  entry  directed  in  T[  71. 

88.  When  it  is  desired  to  trace  the  success  of  a 
given  line  of  goods,  a  special  account  may  be 
opened  (1[24),  in  which  case  the  items  of  both 
purchase  and  sale  can  be  fully  detailed. 

In  all  ordinary  Cash  purchases,  the  accompany- 
ing- bill  being"  preserved,  the  items  are  not  required 
in  Mdse.  Account  (^25). 

Cash  sales  of  Mdse.  "over  the  counter"  are  g*en- 
erally  aggregated  in  one  item  for  each  day,  to  cor- 
respond with  the  entries  to  Cash  Account. 

If  for  any  reason  it  is  desired  to  preserve  a  rec- 
ord of  the  items,  they  either  must  be  included  in 
the  entry  to  Mdse.  Account,  or  a  copy  of  the  bill 
rendered  with  the  goods  should  be  retained. 

89.  In  all  systems  it  is  usual  to  keep  a  rough 
"Blotter"  or  Sales-Book  for  the  hasty  or  careless 
entries  of  business  events  as  they  occur,  to  be 
properly  entered  at  the  close  of  the  day  or  when 
convenient  in  the  regular  book  or  books. 

For  mechanics  or  others  this  is  often  necessary 
to  ensure  neatness  of  the  permanent  record. 


CHAPTER  VII. 
BALANCING  ACCOUNTS. 

90.  The  Balance  of  an  account  means  the  ex- 
cess of  one  side  over  the  other,  or  the  difference 
necessary  to  make  the  two  sides  equal. 

If  it  is  a  personal  account,  the  balance  on  the 
Debit  side  will  show  the  amount  the  person 
owes. 

If  the  Credit  side  is  the  larger,  the  balance  will 
show  the  amount  due  to  him. 

91.  To  Balance  an  account  is  to  determine  the 
difference  between  the  totals  of  the  Dr.  and  Cr. 
sides  and  to  enter  that  difference  upon  the  lesser 
side,  then  to  add  the  columns  and  place  the  equal 
footings  below. 

92.  To  complete  the  record  or  to  preserve  the 
equality  of  the  two  sides,  a  corresponding  entry 
must  be  made  upon  the  opposite  side  of  the  same 
account  after  the  footing  is  completed.  This  is 
called  ^^  Carrying  Down  the  Balance,^^ 

These  two  entries  of  the  same  amount— one 
upon  each  of  the  two  opposite  sides  of  the  ac- 
count—leave the  balance  unchanged;    for, 

93.  It  is  evident  that  when  the  Dr.  and  Cr. 
sides  of  an  account  are  equal,  they  cancel  each 
other;  also  that  equivalent  amounts  on  the  two 
sides  cancel  each  other. 

3:2 


33 

It  is  equally  self-evident  that  adding  the  same 
amount  to  both  sides  of  an  account  does  not 
change  its  standing*. 

94.  To  Close  an  Account  is  to  balance  it  by 
making  the  Dr.  and  Cr.  sides  equal,  carryuifj  the 
balance  to  the  opposite  side  of  some  other  account. 

95.  Closing  one  account  into  another  has  sim- 
ply the  effect  of  presenting  in  the  second  account 
the  same  balance,  and  upon  the  same  side,  as  was 
previously  found  in  the  first. 

That  is,  if  Mdse,  showing  a  Cr.  balance  of  $100 
is  to  be  closed  into  Gain-and-Loss  Account,  this 
entry  will  be  made:  Mdse.  Dr.  to  Gain  and  Loss, 
$100;  which  will  close  Mdse,  Account,  both  sides 
being  equal. 

Then  Gain-and-Loss  Account  will  be  credited 
by  Mdse.  $100,  which  gives  a  credit  amount  in 
Gain-and-Loss  Account  corresponding  with  the 
original   difference    to    the   credit   of  Mdse. 

96.  Balancing  and  other  entries  not  recording 
actual  transactions  are  preferably  to  be  in  red 
ink  or  otherwise  distinguishable.  But  this  is  of 
minor  importance. 

The  manner  of  ruling  in  balancing  will  be  seen 
in  the  examples  given.  It  is  important,  for  the 
appearance  of  the  Book  of  Accounts,  that  this— 
and,  indeed,  all  the  work— be  neatly  done. 

97.  Cash  Account  should  be  frequently  balanced, 
to  detect  omissions  or  mistakes. 


34 

The  Dr.  balance  of  Cash  Account  is  the  amount 
on  hand.  Ca«h  can  never  properly  show  a  Cr. 
balance,  as  no  money  can  be  paid  out  in  excess 
of  that  received. 

98.  A  Trial  Balance  is  a  sheet  upon  which  the 
balances  of  the  several  accounts  have  been  drawn 
off,  showing  the  exact  state  of  the  Book  of  Ac- 
counts. 

The  Trial  Balance  measurably  attests  the  cor- 
rectness of  the  book,  and  should  be  taken 
monthly. 

Of  course  this  sheet  is  self-balancing  if  the 
work   has   been   correct. 

A  page  in  the  Book  of  Accounts  may  be  devoted 
to  preserving  the  Trial  Balances  if  desired. 


CHAPTER  VIII. 
CLOSING  THE  BOOK  OF  ACCOUNTS. 

99.  The  task  usually  most  dreaded  by  the  young 
book-keeper  is  Closing  the  Books. 

The  difficulties  are  more  imaginary  than  real  if 
the  relations  of  the  two  classes  of  accounts,  Real 
and  Representative,  are  kept  clearly  in  view. 

100.  Real  Accounts  represent  actual  Assets  or 
Debts.  These  must  have  a  known  or  assumed 
value  at  the  time  the  record  is  made,  which  is,  of 
course,  a  part  of  the  Resources  or  Liabilities. 

101.  Representative  Accounts  have  a  value  to 
be  determined  in  the  progress  of  the  business. 
They  are  either  Speculative— that  is,  represent 
property  or  interests  bought,  held,  or  sold  for 
profit— or  Expense  Accounts,  which  record  the 
cost  or  expense  of  the  enterprise.  These,  there- 
fore,  belong  to   Gain   or  Loss. 

102.  Mdse.  and  similar  Accounts  are  "repre- 
sentative" of  gains  or  losses  which  are  unascer- 
tained. They  exhibit  the  cost  of  purchases  on  the 
Dr.  side,  and  the  proceeds  of  sales  on  the  Cr.  side. 

The  difference  or  balance  of  the  account  will 
show  the  Gain  or  Loss— that  is,  when  we  first  know 
what  goods  there  are  remaining  on  hand,  to  be  de- 
termined by  an  Inventory,  and  the  incidental  cost 
of  selling,  shown  by  Exx)ense  Account. 

35 


36 

103.  It  is  clear  that  the  profit  upon  goods  sold 
enters  into  Gain-and-Loss  Account  as  a  Gain,  and 
the  expense  of  selling  as  a  Loss. 

The  determined  value  of  Mdse.  remaining  on 
hand  as  per  Inventory  becomes  a  real  possession, 
or  Resource.  The  expense,  if  ascertained  and  un- 
paid, constitutes  a  real  debt,  or  Liability. 

104.  The   purpose    of  a   general   closing  of  ac-  . 
counts  is, 

(1)  To  determine  the  Gain  or  Loss  which  has  been 
realized,  and  to  express  this  amount  in  Capital 
Account— that  is,  to  add  it,  if  a  gain,  to  thQ  Capital, 
or  subtract  it,  if  a  loss.  This  result  is  found  in  the 
balances  of  the  Representative  Accounts. 

(2)  Also  to  determine  from  the  balances  of  the 
Heal  Accounts  the  Assets  and  Indebtedness,  the 
Dr.  balances  showing  what  we  owe,  and  the  Cr. 
balances  what  is  owing  to  us. 

105.  The  first  step  is  to  Inventory  all  assets,  such 
as  Mdse.,  Real  Estate,  etc.,  and  credit  each  account 
with  the  value  unsold  or  remaining  on  hand. 

All  such  entries  not  recording  a  transaction  or 
requiring  an  opposite  entry  may  be  in  red  ink. 

106.  Preliminary  to  closing  prepare  what  is 
called  a  Balance  Sheet,  which  is  simply  an  exhibit 
under  two  heads  of  the  balances  of  all  accounts. 

Under  the  one,  headed  "Balance  Account"  or 
"Resource  and  Liability,"  place  the  balances  of  all 
assets  and  debts— that  is,  the  balances  of  Real  Ac- 
counts. 


37 

Under  the  otlier,  styled  "  Gain  and  Loss,"  place 
tlie  balances  of  Representative  or  Speculative  and 
Expense  Accounts. 

107.  To  tlie  Dr.  of  Balance  Account  upon  this 
sheet  transfer  the  Dr.  balances  of  Accounts  due, 
and  of  Bills  Receivable— that  is,  of  all  accounts 
showing"  Resources;  also  the  amounts  on  hand  as 
per  Inventory  which  have  been  credited  to  Mdse. 
and  similar  accounts. 

108.  To  the  Or.  of  Balance  Acct.  place  the  Cr.  bal- 
ances of  Bills  Payable  and  of  accounts  against  the 
business— that  is,  Real  Accts.  showing  Liabilities. 

Also  enter  to  the  Cr.  side  of  Balance  Account 
the  balance  of  Capital  Account.  But  note  this 
amount  in  the  Transaction  column,  and  do  not 
extend  it  in  the  Credit  amounts  till  the  Q-ain  or 
Loss  of  the  business  is  determined  and  added  to 
or  subtracted  therefrom,  as  will  be  seen  (1[  110). 

109.  JSText  transfer  to  the  Dr.  of  Gain  and  Loss 
Account  on  the  Balance  Sheet  the  Dr.  balances  of 
all  accounts  showing*  cost,  such  as  Expense,  etc. 

To  the  Cr.  of  this  account  place  the  Cr.  balances 
of  all  accounts  showing*  Income  or  Gain,  including 
Merchandise  and  similar  accounts  after  Inventory. 

That  is,  enter  on  the  same  side  of  Gain-and-Loss 
Account  any  excess  or  difference  the  several  Rep- 
resentative Accounts  may  show. 

no.  Close  the  Gain-and-Loss  Account  on  the 
Balance  Sheet  to  Capital  Account,  or  divide  it 
among  the  Partners'  Accounts. 

If  there  has  been  a  gain,  add  the  amount  to  the 
original    Capital  balance  in   Balance  Account  (see 


38 

If  108);  and  if  there  lias  been  a  loss,  subtract  the 
same  and  extend  the  result,  which  will  close 
Balance  Account. 

111.  Now,  to  actually  close  the  accounts  in  the 
book :  Open  a  book  account,  headed  Gain  and  Loss, 
and  transfer  to  it  the  balances  of  the  Representa- 
tive Accounts.  In  other  words,  close  these  accounts 
into  Gain-and-Loss  Account,  which  will  then  corre- 
spond with  that  part  of  the  Balance  Sheet,  and  is 
to  be  closed  into  Capital  Account  direct. 

112.  Next,  close  all  Real  Accounts  To  or  Bij  Bal^ 

ance,  and  the  book  is  ready  for  new  business. 

It  can  be  opened  by  "brining  down"  the  bal- 
ances showing  Resources  and  Liabilities,  as  directed 
in  opening  the  book. 

Or,  to  repeat :  make  a  closing*  entry  To  or  By  Bal- 
ance upon  the  lesser  side,  and  after  footing  and 
balancing  make  an  entry  By  or  To  Balance  of  the 
same  amount  on  the  opposite  side. 

113.  Gain-and-Loss  Account  represents  a  past 
increase  or  diminution  of  Capital.  The  Cr.  side 
shows  what  has  been  gained,  the  source  of  gain  or 
receipts  being  credited ;  the  Dr.  side,  what  has  been 
lost,  losses  or  payments  causing  a  Dr.  entry. 

Any  increase  of  Capital  must  be  shown  in  Capi- 
tal Account  by  a  corresponding  increase  of  Re- 
sources—that is,  if  the  business  has  been  con- 
ducted at  a  profit,  the  assets  of  Cash,  Mdse.,  or 
balances  of  accounts  must  show  a  gain. 

If  there  has  been  a  loss,  it  is  evident  that  a  cor- 
responding  increase  of  Liabilities  or  diminution 


39 

of    Resources    must   appear   in   Balance   Account, 
thus  reducing-  tlie  Capital  by  tlie  same  amount. 

114.  Resource-and-Liability  Account  refers  to 
future  expectations  and  obligations,  constituting" 
present  known  Capital.  Tlie  Cr.  side  includes  what 
the  business  owes  (other  people  or  accounts  being 
credited),  and  the  Dr.  side  what  is  owing  to  the 
business  (others'  debits). 

115.  Preserving  this  distinction  will  greatly  aid 
in  making  the  work  clear: 

Past  Gains  are  Cr, ;  past  Losses  are  Dr. 

Future  Liabilities,  Cr, ;  future  Resources^  Dr, 

Hence  a  past  Grain  (Cr.)  implies  a  corresponding 
future  Resource  (Dr.);  a  past  Loss  (Dr.)  implies  a 
corresponding  future  Liability  (Cr.). 

116.  To  repeat:  Capital,  or  Proprietor's,  Account 
shows  the  Capital  at  commencing;  the  Dr.  side 
shows  the  debts;  the  Cr.  side  shows  the  effects. 
The   difference   is   the   Net    Capital. 

117.  Gain-and-Loss  Account  shows  the  Grain  or 
Loss.  The  Dr.  Balance  shows  Loss;  the  Cr.  shows 
Gain.  The  difference  shows  the  increased  or  dimin- 
ished Capital,  and  is  carried  into  Capital  Account. 

118.  The  Dr.  of  Balance  Account  shows  Re- 
sources; the  Cr.  shows  Liabilities.  The  balance 
shows  the  actual  assets,  or  Capital,  and  corresponds 
to  the  balance  of  Capital  Account,  but  upon  the 
opposite  side. 

Capital  is  expressed  on  the  Cr.  side  of  Capital 
Account,  and  on  the  Dr.  side  of  Balance  or  Re- 
source-and-Liability Account. 


40 

The  final  proof  is  the  agreement  of  the  Capital 
and  Balance  Account  ditferences. 

119.  The  Order  of  Steps,  then,  in  closing  is  as 
follows: 

IsU  Inventory  Assets,  and  enter  the  amounts  (in  red)  to  the  Cr,  of 
the  respective  accts, 

2d,  Make  up  a  Balance  Sheet  showing  a  Gain-and-JLoss  Acct.  and 
a  Balance    Acct, 

3fl.  Close  all  accounts  sfiowing  Gain  or  Loss  into  Gain-aud-TjOSs 
Account, 

4th,  Close  all  accoutits  shotcing  Besources  or  Liahilities  into  Bal- 
afwe  Account. 

(Carry  down  these  balances  for  the  opening  of  new  accounts.) 

Sth.  Close  Gain-and-Loss  Account  into  Capital  Account, 

6th,  Capital  Account  and  Balance  Account  will  mutually  close 
each   other. 

120.  Where  the  business  is  large,  some  days 
or  weeks  may  elapse  before  the  Book  of  Accounts 
can  be  closed.  Meanwhile,  the  daily  transactions 
continue,  and  the  daily  record  must  be  kept. 

In  such  a  case  omit  three  or  four  lines  for  the 
closing  entries  of  such  accounts  as  have  balances 
to  carry  forward,  and  resume  the  entries  below, 
with  an  opening  line  left  for  the  balance  to  be 
entered  when  the  amount  is  determined. 

In  this  way  the  continuity  of  the  record  is  not 
interrupted,  nor  do  the  current  entries  interfere 
with  closing. 


CHAPTER  IX. 

ADVANTAGES  OF  THE  BUSINESS-STANDARD 
SYSTEM. 

121.  Double-Entry  Book-Keeping  is  the  art  of 

keeping"  accounts  by  means  of  a  full  or  complete 
record— that  is,  a  Debit  and  Credit  entry  for  each 
transaction. 

By  this  system  alone  can  the  state  of  the  busi- 
ness be  known,  or  the  means  afforded  to  determine 
the  gain  or  loss. 

122.  Single-Entry  Book-Keeping,  so  called,  is 
an  incomplete  record,  where  an  entry  is  made 
only  to  the  Dr.  or  Cr.  side  of  a  single  account. 

By  reason  of  its  imperfect  character,  Sing-le- 
Entry  Book-Keeping*  is  unworthy  the  name  of  a 
^nethod  of  keeping  accounts. 

It  fails  to  secure  the  very  ends  desired  in  book- 
keeping, which  are  assurance  of  correctness  in  the 
process,  and  read^^-  attainment  of  results  in  deter- 
mining- the  state  of  the  business. 

123.  At  least  three  books,  and  often  four  oi- 
uiore,  are  reg-arded  as  essential  in  nearly  all  ex- 
isting* methods  of  keeping*  accounts  by  Double 
Entry— viz. : 

(1)  The  Day  Book,  for  a  daily  record  of  trans- 
actions as  they  occur. 

41 


42 

(2)  The  Journal,  to  wMch.  tliese  records  are 
transferred  in  wliat  is  called  journalized  form 
— tliat  is,  with,  the  name  of  the  proper  Dr.  and  Cr. 
Accounts. 

(These  hooks  are  now  frequently  combined  in 
one.) 

(3)  The  Cash  Book,  for  all  records  of  Cash  trans- 
actions. 

(4)  The  Ledger,  to  which  are  transferred  from 
the  Journal,  or  Cash  Book  and  Journal,  all  the 
amounts,  hut  not  the  items,  recorded  in  the  Day 
Book. 

These  are  carried  to  the  Dr.  or  Cr.  side  of  the 
several  accounts,  which  are  kept  upon  separate 
pages  of  the  Ledger.  This  work  is  called  Post- 
ing. 

124.  The  original  entries  are  sometimes  made 
in  four  books— Cash  Entries,  in  the  Cash  Book; 
Mdse.  bought,  in  the  Invoice  or  Mdse.  Book ;  Mdse. 
sold,  in  the  Sales  Book;  and  Miscellaneous  Trans- 
actions, in  the  Day  Book— and  from  each  of  these 
posted  into  the  Ledger. 

125.  Life  is  too  short  for  three,  or  even  two, 
records  of  every  business  transaction,  unless  there 
is  absolute  necessity  for  such  repetition. 

The  simple  yet  complete  system  here  embodied 
requires  but  one  Book  of  Accounts. 

In  this  the  daily  record  is  made  directly  to  the 
proper  accounts,  where  all  items  are  preserved, 
facilitating  a  determination  of  Balances,  and  mak- 
ing out  Bills  and  Accounts  Current. 


43 

126.  Tlie  method  presented  in  tills  text-book 
Is  an  orig-inal  adaptation  of  tlie  simplest  form  of 
ralin^  (known  to  tlie  trade  as  Journal  or  Casli- 
Book  Ruling",  or  witli  an  Index  as  the  "  Single-Entry 
Ledg-er  ")  to  a  perfect  Double-Entry  Sj^stem  of  keep- 
ing accounts. 

It  conforms  the  statement  of  all  accounts  to  the 
universally  approved  manner  of  stating  a  Gash 
Account. 

127.  Any  intelligent  accountant  can  adapt  the 
Direct-Entry  Method,  the  Single-Page  Account, 
and  the  simple  form  of  ruling  here  recommended 
to  any  ordinary  business  not  so  extended  as  to 
render  more  complex  forms  desirable. 

128.  The  Original  Entry  of  the  full  transaction, 
required  by  other  systems  to  be  made  in  some  one 
of  several  books,  and  thence  transferred  to  the  two 
Ledger  Accounts,  is  here  made  directly  to  the 
proper   accounts. 

The  second  entry,  to  Cash  or  Mdse.  Account,  as 
required  in  1[  79,  corresponds  to  one  of  the  two 
Postings  required  in  other  forms. 

129.  As  Cash  and  Mdse.  Entries  usually  consti- 
tute the  larger  part  of  a  business  record,  there  is 
a  great  saving  of  time  by  this  method. 

In  the  few  cases  where  the  items  have  to  be  re- 
peated in  the  second  entry,  the  advantages  of  per- 
fection of  record  and  convenience  of  reference 
more  than  compensate  for  the  sliglit  labor.  It  is 
usually  only  in  Mdse.  Entries  that  the  items  are 
numerous. 


44 

130.  The  first  merit  of  this  system  is  its  exceed^ 
ing  simplicity. 

The  form,  is  the  easiest  ever  proposed  for  a  writ- 
ten record  of  account. 

It  conforms  to  the  universally  accepted  method 
of  keeping"  a  Cash  Accomit,  and  is  equally  clear  and 
desirable  for  all  accounts. 

131.  The  next  advantage  is  economy  in  labor  and 
in  space* 

The  simple  direct  entry  is  the  most  easily  made. 

As  the  entries  follow  one  another  immediately, 
whether  extended  on  the  Debit  or  on  the  Credit 
side,  there  is  absolute  economy  of  space. 

132.  The  next  merit  is  greater  accuracy^  as  every 
copy  or  transfer  of  an  item  from  one  book  to  an- 
other increases  the  liability  to  error. 

Every  account  is  fully  stated  where  it  belongs, 
and  there  is  no  delay  in  referring-  to  other  books 
or  waiting  for  the  posting  of  an  account. 

133.  Another  point  of  superiority  is  that  the 
account  thus  stated  is  in  the  Account-Current  form 
—the  one  most  easily  understood— is  always  posted, 
and  is  tnost  readily  balanced, 

134.  In  short,  the  system  here  presented  is  the 
most  simple,  the  most  accurate,  the  most  economical 
in  space,  the  most  convenient  in  use,  and  ensures  the 
most  satisfactory  results. 

135.  Any  existing  Single-Entry  Books  can  be 
changed  to  Double  Entry  by  opening  a  Resource- 


45 


and-Liability  Account,  and  transferring  to  it  the 
Balances  of  all  accounts  on  the  hooks  showing 
Assets  or  Dehts,  and  all  amounts  ascertained  hy 
Inventories. 

The  difference  between  the  two  sides  of  this 
account  will  show  the  Net  Capital,  which  can  he 
placed  to  the  credit  of  Capital  Account.  If  there 
are  partners,  it  can  he  divided  according  to  their 
several   shares. 

The  new  accounts  to  he  opened  will  he  Mdse., 
Farm,  Lumber,  or  Material,  or  whatever  accounts 
represent  avenues  of  income  or  gain,  and  Expense, 
Commission,  Labor,  Insurance,  or  whatever  ac- 
counts  represent   outgoes  or  cost. 

If  Notes  are  given  or  received,  open  Bills-Pay- 
able or  Bills-Receivable  Account. 

136.  The  essential  principles  of  accounts  and 
the  simplest  method  of  recording  them  have  been 
here  so  presented  that  it  is  confidently  believed 
one  may  be  prepared  by  the  study  of  this  little 
book  to  comprehend  any  system  of  book-keeping, 
and  to  undertake  the  charge  of  any  existing  Books 
of  Account. 


CHAPTER  X. 
THE  BOOK  OF  ACCOUNTS  ILLUSTRATED. 

137.  A  popular  handbook  of  Book-keeping"  should 
as  far  as  possible  deal  with  familiar  business  events. 

In  the  succeeding  illustrative  exercises  there  is, 
therefore,  no  attempt  to  present  the  more  com- 
plicated phases  of  business  life,  with  the  elab- 
orate appliances— for  example— of  the  banking- 
house  or  the  railway-office.^ 

In  these  departments  as  elsewhere  the  same 
simple  principles  apply,  and  a  corresponding-  sim- 
plicity of  record  is  not  only  possible,  but  most 
desirable.  Its  value,  however,  as  well  as  its 
sufficiency,  is  best  exemplified  in  the  more  com- 
mon details  of  business  life. 

138.  The  few  Illustrations  here  given  are  in- 
tended to  serve  simply  as  examples  to  indicate 
the  ready  adaptability  of  the  Business- Standard 
System  to  the  requirements  of  most  branches  of 
business. 

139.  The  several  Transactions,  with  appended 
directions,  are  desigTied  as  helps  in  overcoming- 
the  more  frequent  difficulties  which  arise  in 
actual   practice. 

However  simple  these  examples  may  seem  to 
be,  they  are  types  of  all  possible  commercial 
events,  each  of  which  may  be  solved  by  the 
same    careful    analysis. 

46 


47 

140.  Tlie  Simple  Cash  Acct.  (p.  49)  will  be  recog- 
nized by  all  wlio  have  kept  any  business  record, 
and  should  become  familiar  to'  every  student. 

141.  The  Personal  and  Mdse,  Accfs,  (p.  50)  illus- 
trate the  form  of  common  Dr.  and  Cr.  entries 
and  the  condensed  form  of  entr^^  to  Mdse.  Acct. 

142.  The    Transactions  for   a  Boy^s  Acct,    (p.   51) 

afford  an  exercise  of  the  simplest  character  for 
preliminary  practice. 

143.  The    Mercantile    Series   of   Accts,    (p.    52)    is 

intended  to  afford  a  measurably  complete  illus- 
tration of  the  course  of  ordinary  business,  includ- 
ing opening  the  book  of  accounts,  the  history  of 
the  business,  and  closing  the  record. 

144.  The  Partnership  Acct.  (p.  62)  simply  points 
out  the  variations  involved  by  a  divided  interest 
in  the  business. 

145.  The    Transactions  for   a  Farm  Acct,    (p.    64) 

are  suggestive  of  the  many  ways  in  which  this 
form  of  account  may  serve  the  interests  of  the 
farmer. 

146.  The   Transactions  for  a  Mechanic's  Acct,  (p. 

66)  indicate  somewhat  the  record  required  by  the 
business  of  a  mechanic  or  small  manufacturer. 

147-  Transactions  for  General  Practice  (p.  67)  sup- 
ply data  for  a  series  of  ordinary  accts.,  the  busi- 
ness being  conducted  at  a  loss. 

148.  Transactions  (p.  QS)  give  a  similar  illustra- 
tion where  the  business  resu]ts  profitably. 


48 

149.  Transactions  (p.  70)  offer  to  the  student 
sug-gestions  for~  a  brief  series  of  accts.  in  a  part- 
nership business. 

150.  As  the  method  of  recording  in  all  these 
cases  is  absolutely  uniform,  there  is  no  necessity 
for  a  lengthy  series  of  exercises.  Little  difficulty 
will  be  experienced  by  teacher  or  student  in 
multiplying  illustrations  to  any  desired  extent. 

These  should  at  first  be  within  the  range  of 
the  actual  experience  of  the  learner,  and  grad- 
ually extended  to  new  and  untried  fields. 


t4ll  business  transactions  are  resolvable  into  Debit 
and  Credit  entries  of  equivalent  amounts- 
Mi  forms  of  record  are  modifications  or  compli- 
cations of  the  Simple   Form  here  presented. 

One  Booh  of  Accounts  of  this  simple  fomn  is 
adequate  for  most  business  purposes,  and  ensures 
accuracy,  economy,  and  facility  in  practical  use. 


EXERCISE  No.   1 -SIMPLE  CASH  %. 


Cash. 

nr. 

Ci\ 

Jan, 

1 

To  Amount  on  Hfind, 

75 

50 

ff 

2 

By  Paid  for  Board, 

10 

tf 

S 

ft           ft       Overcoat, 

15 

tf 

-^ 

ft           ft        Washing, 

.75 

ff           ft       Car-fare, 

.50 

1 

25 

By  Balance, 

49 

25 

= 

75 

50 

75 

50 

To  Balance  hroU  down. 

49 

25 

ff 

7 

To  Reed,  1  Week's  Salary, 

18 

ff 

8 

By  Paid  for  Postage, 

.75 

ft           ff       Book, 

1,00 

1 

75 

ff 

9 

tf            ft       Board, 

10 

tf 

11 

ft           ff       Washing^ 

To  Reed,  return  of  loan, 

5 

50 

By  Balance  on  hand, 

60 

To  Balance  on  hand, 

72 
60 

25 

72 

25 

ff 

u 

To  Reed,  for  Salary, 

18 

ff 

16 

By  Paid  for  Board, 

10 

ft 

17 

ft    Sundry  Expenses, 

1,25 

ff    Contribution  at  Church,  MO 

1 

75 

By  Balance, 

016 

25 

To  Bat.  on  handbrU  down, 

78 
66 

25 

78 

49 


EXERCISE  No.  2.-PERS0NAL  AND  MDSE.  %s. 


CyniJLS   Fuller*, 


JDr.     Cr. 


Feb. 

s 

To  7  lbs.  Gran.  Sugar,     @.  llpf 
ff    i   ff    Oolong  Tea,             75 
ff   S   ff    Java  Coffee,             SO 

,77 
.38 
.90  [ 

> 

ff    i    ff    Chocolate,                 88 

.19 

2 

H 

>-■ 

'  .*-' 

tl 

7 

ff   1  Gal.  West  Ind.  Mohxsses, 
ff   Ih  lb.  Raisins,             @  16 

.75 

ff    1  paper  Pepper, 

.12 

1 

11 

tl 

9 

ff   1  Bbl.  Star  Mills  Fhur, 

7 

50 

ff 

10 

By  Cash  on  %, 

5 

n 

11 

To  5  lbs.  Bice,                   @  09 
ff   2  Gal.  Vinegar,                18 

45 
,36 

ff   1  phge.  Pulv.  Borax, 

ff  10  lbs.  Lc^d,                      U 

,25 

1 

06 

ft 

12 

140 

ff   1  paper  Starch, 

.20 

ff   5  Gals.  Kerosene,             20 

1.00 

2 

60 

By  Balance^ 

9 

51 

M 

51 

lA 

51 

To  BaL  brof.  down. 

9 

51 

Folio  2. 


2£ercKctncUse, 

Dr. 

Cr. 

Feb. 

3 

By  Sundries.  C.  Fuller ^ 

2 

u 

ff 

7 

ff          ff             ff 

1 

11 

ff 

9 

ff          ff             ff 

7 

50 

ff 

11 

ff          ff             ff 

1 

06 

ff 

12 

ff          ff             ff 

2 

60 

To  Balance^ 

14 

51 

lA 

51 

lA 

51 

By  hdl,  brot.  frd.^ 

14 

51 

50 


EXERCISE  No.  3. 

TRANSACTIONS  FOR  A  BOY'S  ACCOUNT. 

Oct.    1    Had  $4  Cash  on  hand. 
>f      ff    Bought  of  James  Brown  a  Fruit- 
Stand  for  $3,  paying-  $1  down. 
ff      ff    Bought  1  Bbl.  of  Apples  for  $2.50 

ff      ff    Sales  for  the  day  amounted  to  .56 


2.75 

1.75 
2.00 


tl 

2 

ff             tt             It             tt 

1.07 

tt 

3 

It          .  It             It             It 

1.28 

n 

It 

Bought  1  Bbl.  of  Apples  for 

tt 

4 

Sales  for  the  day, 

1.46 

tl 

5 

II             II 

1.27 

It 

It 

Bought  one-half  Bbl.  of  Pears, 

tt 

7 

Sales  for  the  day, 

1.23 

tt 

'' 

Paid  Balance  on  Fruit-Stand, 

It 

8 

Sales  for  the  day, 

.83 

It 

9 

It             It 

1.19 

n 

10 

It             It 

.99 

It 

It 

Fruit  on  hand, 

.63 

What  is  the  amount  of  Cash  on  hand  ?  What  are 
the  total  resources,  or  what  the  increase  of  Capital 
acct.,  or  profit  on  10  days'  sales? 

51 


0 


CO 

h 
2 
D 
O 
O 

o 

< 

o 

if) 


CO     OC 


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W     Id 

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OC 

u 


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O  O 

o 
o 
< 


p 


5  S  Q  -  ^ 

>  4^  H  ^.  o  M 

^       03  r/)      H  .      O  ''"1 

CD  .S   2  C3   3  r^ 


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o 


a   s- 


lo  iH  o  lo  fcr 

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tH   T-*   CO 


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P  0) 

^  U] 

o  o 

•Th  (/)    xi  fr: 


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o 
pq 

ft 

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Pi 

a; 
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u 
ft 

GO 
c5  , 


1=1 

0) 

u 


PI 

(D  *""  ^ 


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P£lft 

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pq  ^g 

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p 


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P  ^  cc 


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CO    r-t   .5 

2  ce  fH  a 

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CD 


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A'     ^      r^ 


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^*  s  ^  $ 

n  o  o  2 
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t-     i    00 


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bOr^     C^    P    P^ 

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P  M  <I  oi  cc 

Oi  O  W     ^   00  O 
tH  G<i  cq    -  CM  CO 


rb 


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O  tfi 
pj    CO 

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oP 

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CD 
02 


53 


Folio  1» 


CcLpttaZ, 


Jan.   1    ^        By  House  and  Lot  on  FSL, 

tf  Store  Fixtures, 

ti   Mdse.  as  per  Inventory, 

ff   Cash  on  hand, 

n  A.  Baldwins  Note, 

n   C.  Dennis  Bat.  %, 

To  Mortgage  on  House  and  Lot, 

It  Bills  Payable,  \ 

n  H  Ferris  Bal  %, 

To  Balance^ 

Neio%. 
Feb,    1  By  Real  Estate  {Net), 

Fixtures, 
Bills  Receivable, 
V.  Williams, 
Cash  on  hand, 
Mdse.  a^  per  Invt., 
To  Bilk  Payable, 
ff  G.  Polhamus, 


Dr. 


Cr. 


To  Balance^ 


1066.25 

204.88 


By  Bal.  {Net  Cap.), 


500 

300 

163 

1066 


2029 


200 
100 


1271  IS 


25 

25 


157 11 


202925 


VIOOO 
V  125 
111 
650 

75 


67 


75 


50 


600 

125 

80 

80 

651 

35 


13 


157113 


1271 13 


54 


Folio  2. 


2£erchcL7X(lise, 

JDr. 

Cr. 

1886. 

-^ 

To  Amt.  of  Goods   on  hand 

Jan. 

1 

2 

^ 

as  per  Inventory, 
n  G.  Polhamus, 

Ill 
700 

75 

V 
V 

S 

so 

By  Sales  25  Bhls.  Flour, 

Jf 

@  $7.50,  Cash, 
ff     IT.  James, 

V  187 

V  ISO 

50 

6 
9 

17 

So 

tf     V.  Williamis, 
To  50Bhls.Flour,  @  $7,  Cash, 

By  same,                        n 
To  200  Bush.  Wheat,  J.  Den- 
nis, @  $1 ;  Fd.  Cash, 
n  Fd.  DJt.  on  C.  Dennis  for 

S50 
1S2 

50 

V  80 
V 

V  JfiO 

V 

18 

St) 

Bal, 
BylOOBu.  Wheat,  @  $1.25, 
Cash, 

67 

50 

V 

V  125 

20 

*3 

ft  Sund.  Cash  Sales, 

V  125 

28 

to 

,1  10  Bhls.  Flour,  @  $8; 

SO 

SO 

Q.R:sNote,60Ds., 
„  50  Bhls.  Flour,  @  $8; 
Cash, 

V.    80 
V  JfiO 

— 
1 

=z 

To  Balance, 

By  Bal,  brot.  dotvn, 

ft    By  Amt.  on  hand  as 
per  Inventory, 
To  Gain  and  Loss  %, 

To  Goods  on  hand  as  per  Invt., 

165 

75 

1527 

50 

1527 

50 

200 

75 

165 

35 

75 

200 

75 

200 

75 

Feh. 

35 

55 


Folio  3. 


Cash. 

Dr. 

C-n. 

Jan. 

1 

'^ 

To  Amount  on  hand, 

650 

}f 

3 

^ 

fi  Mdse., 

187 

50 

V 

5 

It  H.  James, 

60 

V 

9 

^j 

By  Mdse,, 

V  S50 

10 

91 

00 

To  Mdse., 

By  Bills  Paijahle, 

400 

V 

V  16S 

11 

^. 

ff    J.  SmitKs  Consgi., 

V     25 

12 

^ 

To  J.  Smith  Consignment, 

800 

V 

IS 

^ 

By  the  same, 

V  7S5 

16 

00 

ti    Expense, 

If    Bills  Payable,  $100; 
less  BiscL,  $S.6S, 

V  20 

V  96 

S7 

17 

<^* 

II    Mdse., 

y  1S2 

50 

18 

To  Mdse., 

By  Real  Estate,  $100; 
Interest,  $15, 

125 

^  115 

20 

^ 

II    Expense, 

V      s 

<^ 

To  Mdse., 

125 

V 

25 

n  H.  James, 

70 

V 

•^ 

n  Bills  Receivable, 

75 

V 

SO 

II  Mdse., 

By  0.  Polhamus, 

400 

V 

V  600 

15 

II    Exps.,  Petty  Cash, 

V       1 

50 

= 

11    Balance^ 

651 

13 

2892 

50 

2892 

50 

New%. 

Feb. 

1 

To  Balance  hroU  down^ 

651 

13 

56 


Folio  4. 


Jteccl  ^Estate. 


Dr. 


Cr. 


Jan. 


^     To  House  and  Lot  on  J^ St., 

^  £^/  Mortgage  on  same, 

^     To  Cash  Payment  on  Mort, 

By  Balance^ 

New  %. 
To  Balance, 


1000 
100 


1100 


600 


V 

V  500 
V 
600 


1100 


Folio  5. 

Store  Ftj^tuLi^es, 

nv.        Cr. 

Jan. 

1 

'"i 

To  Fixtures  as  per  Inventory, 

125 

V 

Folio  6. 

BtTLs  Recetvcible. 

JDr.        Cr. 

Jan. 

1 

25 
20 

To  A.    Baldwins  Note    due 
Jan.  25, 
By  Cash, 

To  Q.  B.  Note  for  Flour,  due 
Mch.  28, 

75 

V 

V     75 

80 

V 

Folio  7. 
CKcLvles  DenrUs. 

Dr.        Cr. 

Jan. 

1 
17 

'*S 

To  Bal.  %, 

By  Dft.  given  J.  Dennis 
for  Wheat, 

67 

50 

V 

V     67 

50 

57 


Folio  8. 


Hills  JPayctble. 


Dr. 


C-n. 


1886. 

Jan. 

1 

ff 

1 

tt 

IS 

II 

7 

n 

10 

= 

By  Note  to  G.  Mills,  due  July  1, 

ff    Note  to  K.  Lee.,  due  Aug.  SI 
^    To     Discounted     Same,     Cash, 

•    $96.S7;  Disct,  $S.6S, 
°^        By  Acceptance  H.  Ferris'  Dft. 
^     To  Paid  Same, 
To  Balance, 


By  Bah  G.  Mills  due  July  1, 


100 

16S 
200 


46S 


Jan. 


^        By  100  Bhls.  Flour  {Star  M.) 

@$7, 
*3     To  Cash — Rertiitted  Check, 
To  Balance, 


By  Balance f 


600 
100 


700 


V200 


yflOO 


vies 


46S 


200 


Folio  9. 

Servry  Ferris. 

Dr.        Or. 

Jan, 
II 

1 
7 

^        By  Balance  %, 

00     To  Acceptance  National  Bk., 

16S 

V16S 

V 

1 

Folio  10. 

Greorge  FolKctinzLS. 

JDr.        Cr. 

V700 

V 


700 


100\ 


Folio  11. 

H^ertry  tTctmes. 


Dr. 


Cr. 


Jan. 

A 

II 

5 

II 

25 

^     To  100  Bush.  Wheat,  @  $1.S0, 
•s        By  Cash, 


58 


ISO 


ISO 


V 

V  60 

V  70 
ISO 


Folio  12. 


'Vtrtcertt  'Wzlltctms. 


Dr. 


C-n. 


Jan, 


KJ        By  10  Bbls.Flour  @  SO  ds.JS 
^    To  Error  in  entering  above, 
^    To  10  Bhh,  Flour  at  SO  ds.,  $8, 
By  Balance, 

To  Balance, 


V  80 

80 

V 

80 

80 
160 

160 

80 

Folio  IS. 

tToTLTh  SmitTc^s  Corisgt. 


Dr. 


Cv. 


Jan. 


^  To  Pd.Freighton  100 Bbls.Flour, 
^        By  Ami.  reed.  Sales  same, 

^  To  5%  Com.  on  Sales, 

^  "  Remitianee  Proceeds, 


25 

JfO 
7S5 
800 


V 
V800 

V 
V 


800 


Folio  14. 

Dxterest  cltxcZ  Com. 


Dr. 


Cv. 


Jan. 

IS 

n 

16 

If 

18 

= 

By  5(fc  Com.  Sales  J.  Smith 
Consgt., 
II  Disct.  on  Note  due  Aug.  SI 
To  Paid  Interest  on  Mortgage, 
To  Gain  and  Loss, 


V  40 

V     S 

15 

V    ■ 

28 

63 

iS 

6S 

J,S 

63 


Folio  15. 


Dr. 


Ci\ 


Jan, 


^     To  Paid  Rent  of  Store, 
^      II      II     Cooperage, 
^      II      II     Sund.  Items  Petty  Cash, 
By  Gain  and  Loss, 


59 


20 

V 

3 

V 

1 

50 

V 

u 

50 

24 

50 

H 

50 

Trial    BaZciTice, 


Totals. 


Page 

1 

Capital, 

963 

2029 

25 

ff 

2 

Merchandise^ 

1361 

75 

1527 

50 

1 

S 

Cash, 

2892 

50 

221^1 

37 

t 

4 

Real  Estate, 

1100 

500 

t 

5 

Fixtures, 

125 

1 

6 

Bills  Receivable, 

155 

75 

1 

7 

Chas.  Dennis, 

67 

50 

67 

50 

f 

8 

Bills  Payable, 

263 

463 

1 

9 

Henry  Ferris, 

163 

163 

f 

10 

Geo.  Polhamus, 

600 

700 

t 

11 

Henry  James, 

130 

130 

1 

12 

Vincent  Williams, 

160 

80 

t 

IS 

J.  Smith  Consignment, 

800 

800 

f 

U 

Interest  and  Commissioriy 

15 

43 

63 

f 

15 

Expense, 

H 

50 

8820 

25 

8  82025 

ScLlartces. 


Page 

1 

Capital, 

1066 

25 

1 

2 

Mdse., 

165 

75 

1 

3 

Cash, 

651 

13 

1 

4 

Real  Estate, 

600 

t 
1 

5 
6 
8 

Fixtures, 

Bills  Receivable, 

Bills  Payable, 

125 
80 

200 

1 

10 
12 

Geo.  Polhamus, 
Vincent  Williams, 

80 

100 

ft 

14 

Interest  and  Commission, 

28 

63 

u 

15 

Expense, 

2450 

156a63 

1560 

63 

60 


ResoTJLVces  ctThd  Ltctbtlittes, 


Merchandise  as  per  Inventor^/, 

Cashy 

Real  Estaie^ 

Fixtures, 

Bills  Receivable, 

V,  Williams, 

Rills  Payahle, 

G.  Rolhamus, 

Capital,                  1066.25 
204.88 

85 

651 

600 

125 

80 

80 

IS 

200 
100 

1271 

IS 

1571 

IS 

1571 

IS 

CrctzTL  artcL  Loss. 


Dr. 


Cr. 


= 

163.73 
By  Merchandise^   S3. 

It    Int.  and  Com., 

To  Expense, 

ff    Capital^ 

24: 

204 

30 

88 

200 

28 

75 
63 

229 

38 

229 

38 

61 


EXERCISE   No.    5. 

PARTNERSHIP   ACCOUNT. 

James  Carson  and  Samuel  King*  enter  into  part- 
nership, Carson  contribnting"  two-tliirds  the  Capi- 
tal ;  King",  one-third.  Their  interest  in  the  business 
is  to  correspond,  each,  to  draw  the.  same  salary  for 
personal  services. 

Carson  contributes  $6000  Cash;  King,  $2000  in 
Mdse.  and  $1000  in  Cash. 

Three  months  later  Carson  withdraws  $2000  for 
personal  use. 

At  the  end  of  six  months  the  profits  amount 
to  $1800. 

The  personal  account  of  each  shows  $600  cred- 
ited for  salary,  and  Carson  charged  with  ^50  and 
King  with  $700. 

The  accounts  of  James  Carson,  Capital,  and 
Samuel  King,  Capital,  stand  as  seen  on  the  fol- 
lowing page. 

62 


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Jan.    1  By  Capital  Contributed^ 

Apl.    1     To  Cash  Withdrawn, 
June  SO      n  Int.  on  Withdrawal, 

By  Bal.  Personal  %, 
ff   ^Is  Profits, 
To  Balance^ 


By  Balance f 


2000 
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5320 


7S50 


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7S50 


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S.  J^tng,   Capttal. 


nr.        Cv. 


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Cash  and  Mdse., 
June  SO    To  Bal.  Personal  %j 
By  'Is  Profits, 
To  Balance^ 


By  Balance f 


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EXERCISE  No.  8. 

TRANSACTIONS  FOR  GENERAL  PRACTICE 

(Loss). 

May    1    Commenced  with,  a  Cash.  Capital  of  $4,000. 

2    Bought  Mdse.  of  A  for  Cash  ....  800. 

4  Sold  Mdse.  to  B  on  % 170. 

5  Bot.  Mdse.  of  C  on  ISTote  30  Ds.   .   .  .  150. 

6  Sold  Mdse.  to  D  for  Cash  ......  247.50 

tf       8    Paid  Cash  for  Stationery 15. 

n     10    Bot.  Mdse.  of  E  for  Cash 1,800. 

Paid   Cartag-e 3. 

n      11    Sold  Mdse.  to  F  on  his  Note  30  Ds.   .  950. 

n     12    Sold  Mdse.  to  G  for  Cash 37.50 

ff     13    Paid  for  repairs 15. 

n      15    Bot  Mdse.  of  H    on  %  .      250. 

n      17    Sold  Mdse.  to  K  on  % 133.75 

n     20    Sold  Mdse.  to  L  for  Cash     475. 

n     22    Becd.  Cash  of  B  for  % 170. 

n     23    Paid  H  Cash  on  % 100. 

n     24    Paid  for  Clerk-hire 50. 

n     25    Sold  Mdse.  to  M  on  % 500. 

Reed.  Cash  on  %  same 250. 

f,     30    Paid  Rent 100. 

Mdse.  on  hand  as  per  Inventory  .  .  645. 


Resources. 

Cash $2,297. 

Mdse 645. 

Bills  R 950. 

Kon%     133.75 

M  on  % 250. 

$4,275.75 


Liabilities. 

Bills  P $    150. 

H  on  % 150. 

Stock 3,975.75 

$4,275.75 


67 


EXERCISE  No.  a 

TRANSACTIONS  FOR  GENERAL  PRACTICE 
(Gain). 

1    Invested  in  Business,  Cash. $5,000. 

Owe  A  on  acct 500. 

3  Bonglit  Mdse.  of  B  for  Cash 1,400. 

4  Sold  Mdse.  to  C  for  Cash 800. 

5  Sold  Mdse.  to  D  on  acct 40. 

6  B't  Mdse.  of  E  on  Note  at  3  Mos 235. 

8    Accepted  A's  Dft.  10  Days 500. 

10  Sold  Mdse.  to  G  on  his  Note 57.50 

11  B't  Mdse.  on  our  Note  4  mos 1,000. 

12  Paid  Cash  for  Stationery 20. 

15    Sold  Mdse.  to  H  for  Cash 18.75 

L7    Sold  Mdse.  to  K  on  acct 115. 

19    Reed.  Cash  of  D  on  acct 20. 

21  Paid  Acceptance  A's  Dft 500. 

22  Sold  Mdse.  to  L  for  Cash 675. 

25   B*t  Mdse.  of  M  on  acct 96. 

29   Paid  Cash  for  Rent 100. 

"          "       n     Fuel 4. 

t'         ff       tf     Clerk-hire 60. 

Mdse.  Inventories 1,333.50 

68 


TRIAL   BALANCE. 

Dr.  Cr. 

Stock,  Net   Investment  .  .  $4500. 

Casli,  on  liand $4429.75 

Mdse.,  ISlet  cost 1024.75 

D  owes  us 20. 

Bills   Payable 1235. 

Bills  Receivable  57.50 

Expense     184. 

K  owes  ns 115. 

M  due  for  Mdse 96. 

$5831.  $5831. 

Mdse.  acct.  shows  a  gain  as  per  Inventory.        $308.75 

Less   Expenses, 184. 

Net  gain $124.75 


Let  these  exercises  be  expanded  to  full  entries 
and  the  accounts  closed. 


EXERCISE  No.  10. 

TRANSACTIONS  FOR  GENERAL  PRACTICE 
(Partnership). 

May  1    Thomas   Brown   and   Henry  Wright   enter 
into   equal   partnership   in  the   Grocery 
"business. 
Thomas  Brown  furnishes  a  stock  of  goods 
valued  at  $1500,  upon  which  there  is  due 
July  1  a  Note  for  $500. 
Henry  Wright  furnishes  Cash  $500,  Fred'k 
Wheeler's   Note   for  $250,    and    an  Acct. 
against  Byron  Mills  for  $250. 
Cash  sales  for  the  day  ....  $17.50 
w       2    B't  of  Geo.  Jones  on  Acct.  Fruit 

and  Vegetables  as  per  bill .  .  .  $27.50 

Cash  sales  for  the  day  ....    34.63 
tf       3    Sold  Wm.  Peters  on  Acct.  1  Bbl. 
Flour,  $7.50;  1  lb.  Tea,  75  cts. ; 
3   lbs.    Coffee,   at  .30;    7i   lbs. 
Sugar,  $1 ;  1  Doz.  Canned  Fruit, 
$2.50. 
Cash  sales  for  the  day  ....    43.85 
rr       4    B't  ofGeo.  Jones  Fruit  as  per  bill  15. 

Cash  Sales 39.63 

„       5  "  ff 54.20 

B't  Bill  of  Groceries  for  Cash  .  .  115.75 

ff       7    Allowed  Wm.  Peters  damage  on 

Flour 1.50 

Sold  Amos   Hill   1    Doz.    Cans 
Tomatoes,  $1.25 ;  1  Bush.  Pota- 
toes, .50;  1  Basket  Apples,  .75. 
Cash  sales  for  the  day  ....    37.20 
w       8                t'              "              tf        .  .  ,  .    58.25 
B't  of  Geo.  Nash  Bill  of  Gro- 
ceries on  Acct 75. 

ff       9    B't  10  Shares  of  Gas  Co.  Stock 
at  $45.     Paid   for  the    same 
order  on  Byron  Mills  for  his 
Acct.  and  Bal.  in  Cash. 
Cash  sales  for  the  day  ....    43.11 
70 


May  10    B't  Bill  of  Groceries  for  Cash  .  .  $493.75 

Cash.  Sales $56.82 

"11  >*         „      -.  .    49.70 

Reed.   ConsigTLrtient  of  Maple- 
Sugar  from  Isaac  Ramsey  480 
lbs.,  at  12  cts.  delivered. 
Paid  freig-ht  on  same,  $2.75. 
ff     12    Sold  Wm.  Peters  5  Ihs.  Butter, 
at  27  cts. ;   2  lbs.  Cheese,  at  18 
cts. ;  1  Gal.  Syrup,  75  cts. 
Cash  sales  for  the  day  ....    67.43 
"     19  ff  ft  n       week  .  .   .  279.64 

"       26  n  u  u  ,r        .    .    .  235.50 

"     28    B't  our  ISTote  due  July  1,  paying 
for  the  same  10  Shares  Gas 
Co.  Stock. 
Cash  sales  for  the  day  ....    51.87 
»     29    Fredk.  F.Wheeler  Paid  his  ISTote 

and  Int ,  1.75 

Remitted  to  J.  Ramsey  amount 

of  Acct 54.85 

Cash  Sales 53.17 

rr     30    B'tBillof  Groceries  for  Cash.  .  487. 

Cash  sales  for  the  day  ....    40.28 
//      31  n  n  „  ....     68.38 

Paid  Geo.  ISTash  for  Acct 75. 

If     Rent  of  Store 75. 

If     Sundry  Expenses,  as  per 

Petty  Cash 3.75 

Thos.  Brown's   Acct.  for   Gro- 
ceries for  the  month 25.50 

Henry  Wright's 37.84 

Mdse.  on  hand  as  per  Inventory  1650. 

Let  these  accounts  be  written  out  in  full. 
The  bal.  of  Loss-and-Gain  Acct.  should  be  $161.99. 
Similar  exercises  can  be  multiplied  at  pleasure. 

71 


APPENDIX. 


THE  illustrations  for  practical  exercise  already 
^ven  are,  in  view  of  the  simplicity  of  tlie 
method,  far  more  abundant  than  will  be  found 
in  most  text-books. 

It  is  to  be  remembered  that  with  the  Business 
Standard  System  the  student  is  not  compelled  to 
become  familiar  by  practice  with  several  distinct 
and  dissimilar  forms,  but  with  one  form  only. 

In  order,  however,  that  neither  the  backward 
student  nor  the  overburdened  teacher  may  feel 
any  lack  of  the  most  ample  provision  for  every 
possible  real  or  fancied  need  in  the  practical 
acquisition  of  the  art  of  book-keeping",  the  fol- 
lowing additional  Transactions  for  a  Mercantile 
Series  of  Accounts  are  appended. 

It  is  believed  that  with  ordinary  classes  they 
will  not  be  required. 


In  actual  business  subsidiary  books  may  be 
employed  to  any  extent  found  convenient.  A 
Sales-Book,  for  example,  for  the  record  of  sales 
as  they  occur,  can  be  kept  upon  the  same  form. 
An  illustration  is  quite  unnecessary. 

Where  a  Sales-Book  is  kept,  entries  in  the  Book 
of  Accounts  may  be  made  in  brief,  referring*  to 
the  page  of  the  Sales-Book  for  items,  as  in  the 
exercises  which  follow. 

72 


73 

TRANSACTIONS  FOR  A  MERCHANT'S  ACCT. 
April  1. 

I  commence  business  with  the  following-  effects: 
Merchandise  as  per  Inventory,  $5,214.36 

Cash,  2,500. 

ISTotes  against  sundry  persons,  2,300. 

Chas.  Weston  owes  me  on  %,  850. 

$10,864^6 

I  owe  as  follows: 
Lee  &  Judson  on  %,  $475.50 

Payson  &  Orton  on   ^,  287.50 


5. 


$763. 


Bot.  Mdse.  of  Reed  &  Co.  on  my  Note  at  4  mos.,  $541.30 

Bot.  Mdse.  of  Sage  &  Lyon        //       //       6     n         634.96 

9. 

Sold  Jos.  Isaacs  on  %  Mdse.  as  per  Sales- 
Book,  p.  1,  $239.18 
12.— 

Sold  W.  K.  Vermilye  on  Note  at  6  mos.  Mdse., 

S.-B.,  p.  1,  $201.43 
14.  —. 

Sold  Sam.  A.  Betts  for  Cash  Mdse.,  S.-B.,  p.  2,    $221.88 

16. 

Sold  Chas.  K.  Camp  on  %  Mdse.,  S.-B.,  p.  2,        $602.82 
Sold  S.  P.  Avery  for  Cash  1  ps.  Carpeting, 

91yds.,  @  .94,  85.54 
19. 

Bot.  of  Geo.  W.  Peck  on  %  Mdse.    as   per 

Invoice,  $213.14 

Sold  Jos.  Isaacs  on  %  Mdse.,  S.-B.,  p.  3,  154.46 

20. 

Deposited  in  National  Bank,  $2,000. 


74 

23. 

Sold  H.  H.  Lee  on  %  Mdse.,  S.-B.,  p.  3,  $167.50 

24 

Bot.  of  Wm.  Richmond  400  Bbls.  Flour,  @  $5. 
Gave  in  payment  Check  on  National  Bank,    $1,000. 
My  Note  for  30  days  for  "balance,  1,000. 

( Open  a  Flour  Acct,) 

26. 

Reed,  from  G.  W.  Peck  Consig'nment.  of  Wad- 
ding to  be  sold  for  his  %  as  per  Invoice, 
$170.80. 
Paid  Cash  for  Freight  and  Cartage,  $18.75 

Sold  Fredk.  Ashton  on  %  Mdse.,  S.-B.,  p.  4,  24.75 

27. 


Consigned  W.  T.  Coleman  &  Co.,  N.  Y.,  400 
Bhls.  Flour,  @  $5. 

Paid  Freight,  Cartage,  etc.,  $205.25 

Sold  Chas.  K.  Camp  on  % 

1  Bale  Ticking,  450  yds.,  @  15^,  $67.50 

1  Case  Satinets,  600    ^      „     62},  375.  442.50 

30. 

Accepted  Lee  &  Judson's  Dft.  10  Days.,  $475.50 

{Leave  one  blanh  line  in  Bills  Payable  % 
after  each  entry,) 
Sold  S.  A.  Betts  for  Cash,  Mdse.,  S.-B.,  p.  4,  164.50 

Cash  Sales  of  Mdse.  for  the  month,  896.58 

Paid  Store  Expenses  as  per  Petty  Cash,  124. 

Deposited  in  National  Bank,  500. 

May  1. 

Bot.  of  Rudd  &  Carleton  on  %  Mdse.  as  per 

Invoice,  $496. 


75 


In  Company  with  H.  C.  Oakley  Bot.  5,000  lbs. 
Wool  at  25/.  (lam  to  have  5  per  cent. 
Com.  on  Sales,  and  we  share  equally  the 
Gain  or  Loss.)    Paid  Casli  for  my  lialf,       $625. 

H.  C.  Oakley  paid  Ms  half,  625. 

{Open  ''  Wool  %  ''  or  " Mdse.  Co.  A  %.") 
5. 

Sold  W.  K.  Vermilye  on  %  Mdse.,  S.-B.,  p.  4,      $227. 

7. 

Sold  C.  K.  Camp  on  %  2  Bales  Peck's  Wad- 
ding, 1200  yds.,  @  3i^,  $42. 

8. 

Sold  H.  H.  Lee  on  %  Mdse.,  S.-B.,  p.  5,  $352.75 

lO. 

Sold  Jos.  Isaacs  on  % 

1  ps.  Broad  Cloth,  25  yds.,  @  $4,       $100. 

2  "    Cassimere,      56     >>       ff     2,  112.         $212. 

14. 

Paid  Lee  &  Judson's  Draft  accepted  Apr.  30,     $475.50 

Sold  H.  Perkins,  on  his  Note  4  mos.,  Mdse., 

S.-B.,  p.  6,  427. 
15. 

Sold  B.  F.  Udell  for  Cash  5,000  lbs.  Co.  A's 

Wool,  @  .31,  $1,550. 

Paid  Cash  for  Sacking,  Ctge.,  etc.,  $5.25 

My  Commission,  77.50        82.75 

17. 

Reed,  of  Chas.  K.  Camp  Cash  on  %,  $500. 

Sold  Sam.  A.  Betts  for  Cash,  Mdse.,  S.-B.,  p.  7,      250. 

Made  np  an  Account  Sales  Co.  A's  Wool : 
Total  receipts  from  Sales,  $1,550. 

n      Cost,  Charges,  etc.,  1,332.75 

Net  gain,  217.25 

My  half  of  profit  is  108.62 

H.  C.  Oakley's  half,  108.63      217.25 


76 

18. 

Bot.  of  H.  J.  ISTourse  200  Bbls.  Flour  @  $4.75. 
Grave  in  paj^.  Dft.  on  Chas.  Weston,  $850. 
Cash  for  Balance,  100.        $950. 

21. 

Sold  Wells  &  Lyon  for  Cash,  Mdse.,  S.-B.,  p.  8,      $22.65 
Becd.  Cash,  of  Jos.  Isaacs  on  %,  100. 

Sold  Thos.  Franklin  on  %  10  Bbls.  Flour,  @  $5.50,     55. 

24. 

Paid  Rudd  &  Carlton's  Sight  Dft.  for  $496. 

26. 

Reed,  from  W.  T.  Coleman  &>  Co.  Acct.  Sales 
Flour  consigned  them  Apr.  28.    Net  pro- 
ceeds, $2,775. 
They  remitted  Check. 
Sold  A.  B.  Moody  for  Cash,  Mdse.,  103.50 

31. 

Cash  Sales  for  the  Month,  $2,000.62 

Store  Expenses  (from  Petty  Cash),  250.75 

Family  Expenses  (Personal  %),  124. 

Deposited  in  National  Bank,  1,000. 

June  1. 
Paid  my  Note  given  W.  Richmond  Apr.  24,     $1,000. 
Sold  W.  K.  Vermilye  on  % 

1  ps.  Carpeting,  87  yds.,  @  $1,  $87. 

6  yds.  Oil  Cloth,  .75,  4.50        91.50 

Sold  H.  H.  Lee  on  %  remainder  of  Q.  W. 

Peck's  Wadding  for  175. 

2. 

Sold  Chas.   Clark  for  Cash  190  Bbls.  Flour, 

$5.25,  $997.50 

Made  up  an  Acct.  Sales  G.  W.  Peck's  Consign- 
ment Wadding. 

Total  Sales,  $217. 

Charges  paid,  18.75      198.25 

My  Commission  at  5  per  cent.,        8.75 
Credited  G.W.  Peck  net  proceeds,  189.50      198.25 


77 


Sold  Clias.  K.  Camp  on  % 

1  ps.  Carpeting-,  96  yds.,  @  $1,  $96. 

1         "  "  79     //        n        .75,  59.25     $155.25 

Reed  of  H.  H.  Lee  Cash  on  %,  250. 


Discounted  my  ISTote  given  Sage  &  Lyon  Apr. 
4  for  $634.96  at  6  mos. 

Discount  allowed,  $18.52 

Paid  Cash,  616.44    $634.96 

Paid  Fredk.  Asliton  Cash  on  «^,  25. 

8. 


Bot.  of  W.  Richmond  for  Cash  250  Bbls.  Flour, 
@  $5.  Sold  the  sam.e  to  W.  T.  Coleman 
<^  Co.  at  $5.50.  Reed,  in  payt.  Mdse.  as 
perlnv.,  $1,000. 

Draft  on  J.  Cole  at  10  Days,  375. 

{Mdse.  and  Bills  R.  Dr.     Cash  and  Gain  and  Loss  Or.) 
. lO. 

Sold  J.  H.  Gillet  on  his  ISTote  at  4  mos.  Mdse., 

S.-B.,  p.  8.  $480. 

— 12. 

Bot.  of  Jos.  Isaacs  House  and  Lot  on  A  St. 
for  $1600.  Gave  in  payment  Cash  $200, 
Check  Nsitl.  Bank  $500,  H.  Perkins's  Note 

$427.    Bal.  on  %  $473,  $1,600. 

15. 

Reed,  of  Thos.  Franklin  Cash  for  %,  $55. 

H.  H.  Lee  has  accepted  my  Dft.  10  Ds.,  250. 

18.  

The  National  Bank  has  discounted  J.  H. 
Gillet's  Note  at  4  mos.    Discount,     $10.73 

Cash  received,  469.27    $480. 


78 

19 

Sold  H.  C.  Parks  House  and  Lot  on  A  St.  for 
$2,000.    Received  Cash,  $1,000. 

Mdse.  as  per  Invoice,  1,000.     $2,000. 

(Close  Real  Estate  %  into  Gain  and  Loss,) 

23. 

Bot.  Mdse.  at  Auction  for  $250. 

Sold  it  Immediately  for  30o.  $50. 

25 

Sam.  Smith,  has  paid  his  Note  given  Mch.  22d 
for  $1,000  with  Interest. 
3  mos.  and  4  ds.  Int.,  $18.27,  $1,018.27 

Consigned  F.  S.  Travis  100  Bbls.  Flour  bought 
on  my  Note  at  30  ds.,  ®  $5.50,  $550. 

Paid  Frt.  and  Ctge.  in  Cash,  52.  602. 

{Travis  Consignment  Dr.    Bills  P.  and  Cash  Cr.) 
26. 

Jos.  Isaacs  has  paid  his  Note  for  $300  and 

Interest  $5.43,  $305.43 
28. 

H.  H.  Lee  has  paid  his  Acceptance,  $250. 

Bot.  of  G.  W.  Peck  on  %  Mdse.  as  per  Inv.,  173.50 

29. 

Chas.  Weston  has  paid  his  Note,      $1,000. 

With  Interest,                                      18.08  $1,018.08 

30. 

Cash  Sales  this  Month,  $1,260. 

Store  Expenses       ^       (Petty  Cash),  275.50 

Family  Expenses    "  98. 

Due  Fredk.  Ashton  Salary  as  Clerk,  150. 


Mdse.  on  hand,  as  per  Inventory,  $978.34 


KEY. 

Balance  of  Gain  and  Loss  %,  $1,179.93 


THE  BUSINESS  STANDARD  BLANK-BOOK. 

The  Publishers  of  the  Business  Standard  Book- 

Keeping    furnish,   to   accompany  it,  a   convenient 
Blank-Book  for  the  requisite  Book  of  Accounts. 

It  is  provided  with  an  Index,  and  is  sufficiently 
large  for  all  necessai^  exercises.  It  is  furnished 
at  trifling  cost,  and  is  the  only  additional  expense 
to  the  student. 

The  Blank-Book  is,  in  fact,  a  Model  Book  of 
Accounts  in  Miniature,  the  only  difference,  in 
actual  business,  "being  an  increased  number  of 
pages. 

While  this  Blank-Book  will  be  found  a  con- 
venience for  the  learner,  its  use  is  not  essential, 
as  the  ruling  is  precisely  the  same  as  that  of  the 
ordinary  blank-books   in  market,   referred  to  in 

11126. 

The  only  requisite  is  the  simple  ruling  given  on 
the  next  page. 

79 


SAMPLE  PAGE  OF  BOOK  OF  ACCOUNTS. 


Tttle  of  A.ccoJXTht.        Dv,       Cv. 


Month.  Day. 


Transaction. 


80 


$       I 


NOV    9  iSjO 

21-20  )»i- 6,"  3- 


r 


vp    IPA.% 


>^^7 -:?.>.-' 


Nl£^ 


